Term
| For the basic accounting equation to stay in balance each transaction recorded must |
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Definition
| Affect two or more accounts |
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Term
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Definition
| Current assets/Current liabilities |
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Term
| One of the accounting concepts upon which adjustments for prepayments and accruals are based is? |
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Definition
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Term
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Definition
| The mathematical equality of debits + credits after the posting process |
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Term
| Adjusting entries are required |
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Definition
| Because some costs occur with the passage of time and have not yet been journalized |
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Term
| In a service-type business, revenue is considered earned |
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Definition
| When service is performed |
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Term
| Generally accepted accounting principles are |
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Definition
| General rules and standards that are recognized as guidelines for financial reporting |
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Term
| The purchase of an asset on credit |
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Definition
| Increases assets and liabilities |
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Term
| An account is a part of the financial information system and is described by all except which one? |
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Definition
| An account is a source document |
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Term
| A person who wants to determine the balance of a particular account should refer to the |
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Definition
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Term
| the time period assumption states |
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Definition
| The life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared |
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Term
| On a classified balance sheet, companies usually list current assets |
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Definition
| In the order they are expected to be converted to cash |
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Term
| Why do generally accepted accounting principles require the application of the revenue recognition principle? |
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Definition
| Failure to apply the revenue recognition principle could lead to a misstatement of revenue earned in a period |
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Term
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Definition
| Total Liabilities/ Total Assets |
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Term
| Liabilities are generally classified on a balance sheet as |
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Definition
| Current Liabilities and long term liabilities |
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Term
| The retained earnings statement would not show |
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Definition
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Term
| Which of the following is the most appropriate and modern definition of accounting? |
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Definition
| The Information system that identifies, records, and communicates the economic events of an organization to interested users |
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Term
| Which of the following is an advantage of cooperation relative to partnership and proprietorships? |
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Definition
| Reduce Legal Liabilities for investors |
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Term
| Relevant accounting information |
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Definition
| Is information that is capable of making a difference in a business decision |
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Term
| All of the following are significant contribution that the – makes the recording process except |
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Definition
| Keeps complete info about changes in a specific account balance in one place |
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Term
| Recording a cash dividend will |
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Definition
| decrease retained earnings |
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Term
| The most important information needed to determine if companies can pay their current obligations is the |
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Definition
| relationship between current assets + Current Liabilities |
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Term
| A credit is not the normal balance of accounts for which accounts ? |
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Definition
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Term
| An adjusting entry affects? |
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Definition
| The balance sheet account and an income statement account |
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Term
| An awareness of the normal balances of accounts would help you spot which of the following as an error in recording? |
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Definition
| A credit balance in an expense account |
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Term
| Which of the following would not considered an internal user of accounting data for the xanda company? |
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Definition
| Presidents of the employee’s labor union |
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Term
| Stock holders’ equity includes |
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Definition
| retained earnings and common stock |
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Term
| Which activities involve acquiring the property, plant, and equipment assets to run the business? |
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Definition
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Term
| A debit to an asset account indicates |
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Definition
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Term
| In recording an accounting transaction in a double entry system.. |
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Definition
| The amount of the debits must equal the amount of the credits |
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Term
| trademarks would appear in which balance sheet section? |
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Definition
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Term
| A practical decision to expense small capital expenditures rather than record them as property, plant , and equipment and deprecate them probably is made in the basis of the characteristics of |
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Definition
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Term
| A short term creditor is primarily interested in the |
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Definition
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Term
| The advantages of obtaining long term funds by issuing bonds rather than issuing additional common stock, include which of the following? |
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Definition
- Interest payments and tax deductibles to the company while dividends are..
- Expansion is achieved without surrendering ownership control |
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Term
| which of the following best describes credit sales? |
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Definition
| Sales to customers on account |
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Term
| The exclusive right to benefit from a creative work such as a film is a |
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Definition
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Term
| Gains on the sale of fixed assets for cash |
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Definition
| Are the excess of the cash received over the book value |
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Term
| allowance for uncollectible account is |
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Definition
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Term
| Research and development costs should be capitized when the … |
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Definition
| None are correct as research and development costs are never capitalized under U.S. accouting rules |
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Term
| Price reduction is an example of |
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Definition
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Term
| A bond issued at a premium indicates that at the date of issues |
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Definition
| Bonds were issues at a price greater than their face value |
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Term
| 20 million 10 year bond at a 10 percent interst rate …. What effect the financial statement? |
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Definition
| assets and liabilities increase |
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Term
| In recording accounting goodwill |
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Definition
| May be recorded when the company purchases another business |
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Term
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Definition
Stated rate of return 5% and 7%
Market rate of return 7% and 8% |
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Term
| Which of the following definitions describes a secured bond? |
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Definition
| Supposed by specific assets pledged as collateral by the issuer |
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Term
| Which of the following would be recorded as land improvement? |
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Definition
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Term
| Straight line depreciation method |
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Definition
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Term
| Toms textiles shipped the wrong material to a customer, who refused to accept the order. This is an example of…? |
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Definition
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Term
| The primary difference between a note receivable and an account receivable is? |
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Definition
| A note receivable is evidence by a written debt instrument |
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Term
| the cash interest payment for a bond each period is calculated as the… |
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Definition
| Face amount times the stated interest rate |
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Term
| The depreciable cost used in calculation depreciation expense is calculated as the … |
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Definition
| Face amount time the stated interest rate |
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Term
| Straight line depreciation method is a… |
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Definition
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Term
| Which of the following regarding the book value of an asset in correct? |
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Definition
| It reflects the original cost of assets less accumulated depreciation |
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Term
| Replacement of a major component increases the production capacity of equipment from 10 units per hour to 18 units per hour…. Expenditure for the replacement component should be debited to ? |
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Definition
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Term
| Which accounting principle does the direct write-off method violate ? |
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Definition
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Term
| Straight line method depreciation |
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Definition
| Record adjustments to journal entries |
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Term
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Definition
| Gain on sale of display costs |
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Term
| Factor in Physical inventory count? |
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Definition
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Term
| When using a perpetual inventory system why are discounts credited to merchandeise inventory ? |
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Definition
| The discounts reduce the cost of the merchandise inventory |
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Term
| Which of the following is not an objective of a system of internal controls? |
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Definition
| Fairness of the financial statements |
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Term
| If a customer agrees to retain merchandisr that is defective because the seller is willing to reduce the selling price this transaction is known as a sales… |
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Definition
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Term
| Which statement is false? |
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Definition
| Companies that use a perpetual inventory system must take a physical inventory to be able to determine inventory on hand of the balance sheet date and to be able to determine cost of goods sold for accounting period’s |
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Term
| Multiple step income statement? |
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Definition
| Highlights the components of net income |
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Term
| Which of the following would be deducted from the balance per books on a bank reconciliation |
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Definition
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Term
| Under the concept of establishment of responsibility how many people should have the ultimate responsibility ? |
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Definition
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Term
| The entry to record a sale of $ 6,400 with terms of 2/10 n/30 will… |
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Definition
| Credit to sales for $ 6,400 |
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Term
| The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit… |
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Definition
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Term
| Not to be included in the physical inventory of a company … |
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Definition
| Goods held on consignment from another company |
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Term
| Increase in inventoriable costs for the buyer of goods? |
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Definition
| Freight charges paid by the purchaser |
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Term
| A/P clerk also has access to the approved supplier master file for purchases. This principle is… |
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Definition
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Term
| Which of the following is an inventory casting method? |
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Definition
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Term
| In periods of rising prices , which is an advantage of using Lifo inventory costing method? |
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Definition
| Cost of goods will include latest( most recent) costs and thus will be more realistic |
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Term
| which of the following bank reconciliation items would not result in an adjusting entry? |
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Definition
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Term
| the accounting principle that requires the cost flow assumption to be consistent with the physical movement of goods is…. |
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Definition
| Non-existent because there is no such accounting requirement |
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Term
| Which of the following items on items on a bank reconciliation would require an adjusting entry on the companys books? |
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Definition
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Term
| Inventory becomes part of COGS when a company … |
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Definition
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Term
| which of the following account has a normal credit balance |
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Definition
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