Financial ACCT Final Word Scramble

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Question	Answer
Generally excepted accounting principals (GAAP) are formulated by the...	(FASB)Financial Accounting Standards board
Which type of business organization is owned by its stockholders?	Corporation
Which accounting concept or principle specifically states that we should record transactions at amounts that can be verified?	Reliability principle
Fossil is famous for fashion wristwatches and leather goods. At the end of a recent year, Fossil's total assets added up to $336 million, and stockholders' equity was $259 million. How much were Fossils's liabilities?	$77 million
Assume that fossil sold watches to a department store on account for $43,000. How would this transaction affect Fossil's accounting equation?	Increase both assets and stockholder's equity by $43,000
Which part of the accounting equation does a sale on account affect?	Accounts receivable and Retained earnings
Assume that Fossil paid expenses totaling $40,000. How does this transaction affect Fossil's accounting equation?	decreases both assets stockholders' equity
Consider the overall effects on Fossil of selling watches on account for $59,000 and paying expenses totaling $28,000. What is Fossil's net income or net loss?	Net Income of $31,000
The balance sheet reports...	Financial position on a specific date
The income statement reports...	Results of operations for a specific period
What is the sequence that summarizes the accounting process?	Journalize transactions, post to the accounts, prepare a trail balance
The left side of an account is used to record...	Debits
Suppose Frazier Corp. has cash of $46,000, receivables of $65,00, and furniture totaling $203,000. The business has a $109,000 note payable and owes $75,000 on account. How much is Frazier's stockholders' equity?	$130,000 (314,000:assets-184:liabilities)
Your business purchased supplies of $1,000 on account. The journal entry record this transactions is...	Supplies Accounts payable
Which journal entry records your payment for supplies of $1,000 previously purchased on account?	Accounts payable Cash
You paid $500 for supplies and purchased additional supplies on account for $800. Later you paid $400 of the accounts payable. What is the balance in your Supplies account?	$1,300 ($500+$800)
Quick Copes, Inc., recorded a cash collection on account by debiting Cash and crediting Accounts payable. What will the trail balance show for this error?	too much for liabilities
Brent, began the year with total assets of $120,000, liabilities of $78,000, and stockholders' equity of $42,000. During the year the business earned revenue of $109,000 and paid expenses of $32,000 and paid cash dividends of $67,000. How much is equity?	$52,000
What are the distinctive feature of accrual accounting and cash-basis accounting?	Accrual accounting is superior because it provides more information
The revenue principle says...	Record revenue only after you have earned it
Adjusting the accounts is the process of...	Updating the accounts at the end of the period
Which types of adjusting entries are natural opposites?	Prepaids and accruals
A client prepays $480 for a package of six physical training sessions. The gym collects the $480 in advance and will provide the training later. After two training sessions, what should the gym report on its income statement?	Service Revenue of $160 ($480/6=80....80*2=$160)
Assume you prepay the gym for a package of six training sessions. Which type of account should you have in your records?	prepaid expense
Unearned Revenue is always a..	Liability
The adjusted trail balance shows...	Amounts ready for financial statements
Accounting data flow from the...	Balance sheet>Income statement Income statement>Statement of Retained earnings
Which part of the accounting cycle provides information to help a business decide where to expand its operations?	Financial Statements
Which columns of the accounting work sheet show unadjusted amounts?	Trial Balance
Which columns of the work sheet show net income	Income statement
Which situation indicates a net loss on the income statement?	Total debits exceed total credits
Supplies has a $7,000 unadjusted balance on your trail balance. At year-end you count supplies of $3,000. What adjustment will appear on your worksheet?	$4,000 Supplies expense Supplies
Which of the accounts is NOT closed?	Accumulated depreciation
What do closing entries accomplish?	1. Transfer revenues,expenses, dividends to Retained earnings 2. Bring the Retained earnings account to its correct ending balance 3. Zero out the revenues, expenses, and dividends
Is this a closing entry? Salary payable XXX Income summary XXX	NO!
Is this a closing entry? Retained earnings XXX Dividends XXX	YES!-closing dividends into Retained earnings
Assets and liabilities are listed on the balance sheet in order of their...	Liquidity
Hunter has cash of $600, receivables of $800, and supplies of $400. He owes $100 on accounts payable and salary payable of $200. Hunter's current ratio is....	6.00 (add up assets: 600+800+400=1800......then add up liabilities: 100+200=300) 1800/300=6.00
Gross profit percentage=	Gross profit/ Net sales
Gross profit=	Net Sales-Cost of goods sold
Which account does a merchandizer, but not a service company, use?	Sales revenue, Inventory, and Cost of goods sold
The two main inventory accounting systems are the....	Perpetual and Periodic
The journal entry for the purchase of inventory on account is...	Inventory XXX Accounts Payable XXX
The Market purchases inventory for $5,000 and also paid a $330 freight bill. The Market returned 35% of the goods to the seller and later took a @% purchase discount. What is the Market's cost of the inventory that it kept?	$3,642 (5200.35=1820....5200-1820=3380.... 3380.02=68....3380-68+330=$3,642)
Suposse Natural Dyes had sales of $330,000 and sales returns of $41,000. Cost of goods sold was $163,000. How much gross profit did Natural Dyes report?	$126,000 (330,000-41,000-163,000=$126,000)
Suppose Greg's inventory account showed a balance of $10,000 before the year-end adjustments. The physical count of goods on hand totaled $9,700. To adjust the accounts, Greg would make this entry....	Cost of goods sold 300 Inventory 300
Which of the following accounts would Greg close at the end of the year?	Cost of goods sold
The final closing entry for a corporation is...	Retained earnings XXX Dividends XXX
Which subtotals appear on a multi-step income statement, but not a single-step income statement?	Gross profit and Income from operations
Assume Austin sound made net Sales of $88,000, and Cost of goods sold totaled $40,000. Average inventory was $19,000. What was Austin Sound's gross profit percentage for this period?	55% (88,000-40,000=48,000......48,000/88,000=0.545)
Johnson made sales of $9,000 and ended August with inventories totaling $1,000. Cost of goods sold was $7,000. Total operating expenses were $2,000. How much net income did Johnson earn for the month?	$500 (9600-7000-2100=$500)
Which inventory costing method assigns to ending inventory the newest-the most recent-costs inccured during the period?	FIFO-First-in, First-Out
Which inventory costing method results in the lowest net income during a period of rising inventory costs?	LIFO- Last-in, First-Out
Which of the following is most closely linked to accounting conservatism?	Lower-of-cost-or-market rule
At dec. 31,2011, Adam Company overstated ending inventory by $40,000. How does this error affect cost of goods sold and net income for 2011?	understates cost of goods sold and overstates net income
Which of the following is not part of the definition of internal control?-safeguard assets -encourage employees to follow company policy -separation of duites -promote operational efficiency	Separation of duties
Internal auditors focus on ________: External auditors are more concerned with _________.	operations: financial statements
Darice receives cash from customers. Her other assigned job is to post the collections to customer accounts receivable. Her company has weak ________________	Separation of duties
Rearranges messages by a special process	Encryption
The document that explains all differences between the company's cash records ad the bank's figures is called the...	Bank reconciliation
Which items appear on the BANK side of a bank reconciliation?	Outstanding checks Deposits in transit
After performing a bank reconciliation, we need to journalize....	All items on the BOOK side of the reconciliation
Separation of duties is important for internal control of...	Cash payments and Cash Receipts
"Bad Debts" are the same as...	Doubtful accounts and Uncollected accounts
Which method of estimating uncollectible receivables focuses on Uncollectible-account expense for the income statement?	Percent-of-sale approach
How do you find Year-end balance in Allowance for uncollectible accounts?	Beginning balance+Uncollectible account expense-Receivables written off= Ending balance
What is wrong with the direct write-off method of accounting for uncollectibles?	1. doesnt match expenses against revenue very well 2. doesnt set up an allowance for uncollectibles 3. overstates assets on the balance sheet
Which cost is not recorded as part of the cost of a building?	Annual building maintenance
How should you record a capital expenditure?	Debit an asset
Which method almost always produces the most depreciation in the first year?	Double-declining-balance
Which depreciation method would you generally prefer to use for income tax purposes? Why?	Double-declining-balance: it gives the most total depreciation over the asset's life
Which method is used to compute depletion?	Units-of-production method
Which intangible asset is recorded only as part of the acquisition of another company?	Goodwill
Known liabilities of uncertain amounts are.....	reported on the balance sheet
On Jan. 1,2011, you borrowed $12,000 on a five-year, 9% note payable. At Dec, 31, 2012, you should record...	Interest Payable of $1080
Your company sells $160,000 of goods and you collect sales tax of 4%. What current liability does the sale create?	Sales tax payable of $6,400
Bond Price=	Par Value x Issue price
A $400,000 bond priced at 103.5 can be bought or sold for...	$414,000
Which intrest rate on a bond determines the amount of the semiannual interest payment?	Stated rate
Lafferty Corp.'s bonds payable carry a stated interest rate of 7%, and the market rate of intrest is 8%. The price of Lafferty bonds will be at....	Discount
Which characteristic of a corporation is most attractive?	Limited liability
Which characteristic of a corporation is a disadvantage?	double taxation
The two basic sources of corporate capital are...	Paid-in capital and Retained Earnings
Which class of stockholders take the greater investment risk?	Common
Suppose Sweets Bakery issues common stock to purchase a building. Sweets Bakery should record the building at...	its market value
A corporation's income tax payable is computed as...	Taxable income x Income tax rate
A stock dividend...	has no effect on total equity
In a small stock dividend...	Retained earnings is debited for the market value of the shared issued
Stock splits....	decrease par value per share and increase the number of shares of stock issued
A company's own stock that is has issued and repurchased is called....	Treasury stock
Assume that the bank required a company to maintain at least $100,000 in retained earnings. The $100,000 would be shown as....	a restriction to Retained Earnings
Examples of Extraordinary loss...	Earthquake, natural disasters
What is the most widely followed statistic in business?	Earnings per share
Earnings per share is NOT computed for....	Comprehensive Income

Created by: kindra.hebert