Basic Bookkeeping-300

ID Question Question
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1 Which of the following accounts is an asset account ?_____D________

A Cash

B Inventory

C Accounts Receivable

D All of the listed answers are correct

2 Which of the following accounts is a liability account ?____A_________

A Accounts Payable

B Equipment

C Cash

D Owner's Equity

E Salaries

3 Which of the following is a revenue account ?_______A______

A Sales

B Inventory

C Accounts Receivable

D Salaries

E Owner's Equity

4 Which of the following is an expense account ?_____C________

A Sales

B Cash

C Janitorial Services

D Accounts Payable
 E Owner's Equity

5 Which of the following accounts is an equity account ?____D_________

A Accounts Payable

B Cash

C Equipment

D Owner's Capital

E Notes Payable

6 The left side of an account is referred to as ?______B_______

A Increase Side

B Debit Side

C Credit Side

D Decrease Side

7 Transactions are initially recorded in the ?_____C________

A Ledger

B Subsidiary Ledger

C Journal

D Trial Balance

E Financial Statements

8 A record prepared to test that the debit balance accounts equal the credit
balance accounts is ?_____D________

A the Chart Of Accounts

B the General Journal

C the General Ledger

D a Trial Balance

E an Income Statement

9 An entry made in the accounts receivable control account also requires an

 entry to be made in ?______C_______

A the Purchases Journal

B the General Journal

C Accounts Receivable Subsidiary Ledger

D Accounts Payable Subsidiary Ledger

10 The increase in owner's equity resulting from profitable business operations

is called ?______A_______

A Net Income

B Gross Revenue

C Net Assets

D Net Loss

11 Economic events that affect the financial position of a business are called
?______B_______

A Monetary Events

B Transactions

C Financial Events

D None of the listed answers is correct

12 Receiving a payment on account from a customer ?_____D________

A Increases assets and increases assets

B Increases assets and increases revenue

C Decreases assets and increases revenue

D Increases assets and decreases assets

13 Paying an amount owed to a supplier ?______C_______

A Increases assets and increases liabilities

B Decreases assets and increases liabilities

C Decreases assets and decreases liabilities

 D Increases assets and decreases liabilities

14 The current portion of long term debt is classified as ?______D_______

A Long Term Liabilities

B Current Assets

C Owner's Equity

D Current Liabilities

15 Which of the following would be added to the balance per bank when
performing a bank reconciliation ?_____A________

A Deposits In Transit

B Outstanding Checks

C Bank Service Charge

D None of the listed answers is correct

16 Which of the following would require a journal entry when performing a

bank reconciliation ?____C_________

A Outstanding Checks

B Deposits In Transit

C Bank Service Charges

D None of the listed answers is correct

17 A credit to an expense account increases the account's

balance._____B________

A True

B False

18 A debit to which of the listed accounts increases the account's balance

?_____A,C,E________

A Assets

B Liability
 C Expense

D Owner's Equity

E Owner's Draw

19 Documents such as invoices, receipts, and checks are referred to as source

documents.______A_______

A True

B False

20 A debit to an account always increases the account's

balance.____B_________

A True

B False

21 Which of the following accounts normally have a credit ballance

?______B,C,E_______

A Cash

B Sales

C Accounts Payable

D Accounts Receivable

E Owner's Equity

F Equipment

22 Which of the following statements is not correct ?_____B________

A The normal balance of an asset account is a debit balance.

B The normal balance of a liability account is a debit balance.

C The normal balance of a revenue account account is a credit

balance.

D The normal balance of an expense account is a debit balance.

23 The Single Entry System records a debit and credit for each
transaction._____B________
 A True

B False

24 In addition to Cash, the Current Asset Classification includes

?___A,B,C__________

A Accounts Receivable

B Inventory

C Temporary Investments

D Land

E Equipment

F Accounts Payable

25 After posting closing entries all account balances are set to

zero.____B_________

A True

B False

26 Gross Sales are total cash and credit sales made during a
period._____A________

A True

B False

27 Gross Profit is calculated by deducting Cost Of Goods Sold from Net

Sales._______A______

A True

B False

28 A Single-Step Income Statement has a line for Gross Profit ?_____B________

A True

B False

29 A Balance Sheet does not include which of the following ?______D_______

 A Assets

B Liabilities

C Owner's Equity

D Expenses

30 Which of the following is a temporary account ?_____D________

A Cash

B Accounts Receivable

C Owner's Equity

D Sales

E Accounts Payable

31 A type of business that is made up of many owners called shareholders is a

?________B_____

A Partnership

B Corporation

C Sole Proprietorship

D LLC

E All of the listed answers are correct

32 A business that sells it products to another business is called a

Retailer._____B________

A True

B False

33 The Accrual Method of Accounting recognizes revenue (earnings) in the

period that cash is received and expenses in the period that cash payments
are made._______B______

A True

B False

34 ______________ are properties used in the operation or investment

 activities of a business.

Assets
_______________________________

35 _________________ are creditor's claims to the property (assets of a

business.

____Liabilities___________________________

36 ________________ _________________is the owner's rights or claims to

the property (assets) of a business.

Owners Equity
_______________________________

37 The gross increase in owner's equity resulting from the operations and other
activities of a business is called ______________.

Revenue ; Sales; or Income

_______________________________

38 A Credit is an entry in the financial records of a business that increases an

asset, expense, or draw account and decreases a liability, revenue, or equity
account._____B________

A True

B False

39 Profit is the amount that a business's expenses exceeds its

revenues.____B_________

A True

B False

40 Revenue is also called or referred to as income.______A_______

 A True

B False

41 A book containing the account balances for a business's assets, liabilities,

equity, revenue, expense, and draw accounts is called ?____A_________

A the General Ledger

B Trial Balance

C Subsidiary Ledger

D Journal

E Accounting Worksheet

42 Decreases in owner's equity resulting from the cost of goods, fixed assets,
and services, and supplies consumed in the operations of a business are
called ______________.

expenses
_______________________________

43 Bank Reconciliations are normally performed ?_____A________

A Monthly

B Yearly

C Quarterly

D Weekly

44 An example of an account that would normally have a subsidiary ledger

associated with it is ?______D_______

A Cash

B Professional Fees

C None of the listed answers is correct

D Accounts Receivable

45 Which of the following is not information normally provided by an Accounts

Receivable Subsidiary Ledger ?______D_______
 A Amounts Owed by Each Customer

B Amounts Invoiced to Each Customer

C Amounts Paid By Each Customer

D Amounts Owed By Each Supplier

46 The assets of a business are subject to two claims - those of the creditors and
those of the owners._____A________

A True

B False

47 Another term used to refer to the assets of a business is

property._____A________

A True

B False

48 All accounts that normally have a debit balance are increased with a credit
and decreased with a debit.____B________

A True

B False

49 Accounts that normally have a debit balance are ?___B,C,E__________

A Revenue

B Assets

C Expenses

D Liabilities

E Draws

F Owner's Equity

G All of the listed answers are correct

50 In certain cases, an account that normally has a debit balance may end up
having a credit balance or an account normally having a credit balance may
end up having a debit balance._______A______
 A True

B False

51 All accounts that normally have a credit balance are increased with a credit
and decreased with a debit.____A_________

A True

B False

52 Which of the following accounts is not an account that normally has a credit
balance ?______A_______

A Expense

B Liability

C Revenue

D Owner's Capital

53 Which of the following is not an account that normally has a credit balance
?____D_________

A Revenue

B Owner's Equity

C Liability

D Asset

54 All accounts have a normal balnce which is either a debit or a credit

balance._____A________

A True

B False

55 The ledft side (column) of an account is the credit side and the right side
(column) of an account is the debit side.______B_______

A True

B False

56 An ________________ __________________ is a formal financial statemnt

 that summarizes revenues and expenses for a period.

____income statement___________________________

57 The correct order for preparing the formal Financial Statements is

?_______A,B,C,D______

A Income Statement

B Capital Statemnt

C Balance Sheet

D Statement Of Cash Flows

58 The Income Statement is a formal financial statement that shows the amount
and nature of a business's assets, liabilities, and owner's equity as of a
specific point in time.____B_________

A True

B False

59 A Balance Sheet is a formal financial statement that summarizes revenues

and expenses for a specific period of time._____B________

A True

B False

60 Which of the following is not normally included in the Chart Of Accounts

?_________D____

A Account's Name

B Account's Description

C None of the listed answers is correct

D Account's Balance

61 A Chart Of Accounts is normally grouped by Balance Sheet Accounts and

Income Statement Accounts.____A_________

A True
 B False

62 The ________________ ___ __________________ is an organized coded

listing of all the individual accounts used to record business transactions.

_chart of accounts______________________________

63 Owner withdrawals by a sole proprietorship are reported in the income

statement._____B________

A True

B False

64 Payroll Withholdings are classified on the Balance Sheet as Long Term

Liabilities.____B_________

A True

B False

65 Retained Earnings is a part of Stockholder's Equity._____A________

A True

B False

66 An _________________ is a separate record maintained in the General

Ledger for each type of asset, liability, equity, revenue, expense, and draw
that is used to record the summarized increases and decreases using debits
and credits.

_____account__________________________

67 Using the Periodic Inventory System, the cost of merchandise purchased is

debited to the Inventory Account._____B________

A True

B False

68 The cost of land on which a business's store was built should be

 depreciated._______B______

A True

B False

69 Checks received from customers, but not yet deposited in the bank should be
considered a part of a business's Cash Balance.____A_________

A True

B False

70 A Balance Sheet is also known as a Statement Of Financial

Position.______A_______

A True

B False

71 An entry to record Depreciation Expense is recorded in what Journal

?________C_____

A Sales Journal

B Purchases Journal

C General Journal

D Cash Payments Journal

E Cash Receipts Journal

F Equipment Journal

72 A Control Account in the General Ledger is supported by details contained in

a ________________ Ledger.

Subsidiary
_______________________________

73 ___________________ is the process of transferring balances from Journals

to the General Ledger.
 ________Posting_______________________

74 Prepaid Expenses should be classified in a Balance Sheet as

?____D_________

A Fixed Assets

B Intangible Assets

C Current Liabilities

D Current Assets

E Owner's Equity

75 Current Assets minus Current Liabilities is _______Working__________

Capital.

_______________________________

76 A special account used to offsett the balance of another account is called a

_____contra___________ account.

_______________________________

77 Which of the following payroll deductions is not matched by the

employer.______C_______

A Social Security

B Medicare

C Income Tax

78 Which Financial Statement does not cover a Period Of Time._____B________

A Income Statement

B Balance Sheet

C Statement Of Cash Flows

 D Capital Statement

79 If Assets are $50,000 and Liabilities are $30,000 what is Owner's Equity ?
Enter your answer as a whole dollar amount without the dollar sign.

______________20,000_________________

80 Given the following information, Assets- $100,000; Liabilities- $50,000;

Beginning Owner's Equity- $25,000 and Owner Withdrawals- $10,000 the
profit or loss for the period is _____________. Enter your answer as a whole
dollar amount without the dollar sign.

___35,000____________________________

81 Given the following balances, Ending Owner's Equity- $50,000 and Total
Liabilitie- $50,000 the amount of Total Assets is ____________. Enter your
answer as a whole dollar amount without the dollar signs.

100,000
_______________________________

82 In a manufacturing company, inventory that is completed and ready for sale

is called ?______A_______

A Finished Goods

B Work In Process

C Raw Materials

D Store Supplies

83 Company A sells Company B $1,000 of merchandise with credit terms of

2/10/n30. If Company B takes advantage of the discount they will remit a
check in the amount of __________. Enter your answer as a whole dollar
amount without the dollar sign.
 ______________980_________________

84 Which of the following should not be classified in the Balance Sheet as

Property, Plant, & Equipment ?_______A______

A Automobiles held for sale

B Land used in the business

C Building used as an office

D Land Improvements

E Machinery used in the business

85 Which of the following most likely resulted from a recording error

?_____A________

A A Credit Balance in an Expense Account

B A Debit Balance in a Dividend Account

C A Credit Balance in a Revenue Account

D A Credit Balance in a Liability Account

86 The Normal Balance of any Account is ?___A__________

A Side which increases the account

B Left Side

C Right Side

D Side which decreases the account

87 In a Classified Balance Sheet, Current Assets are normally listed

?______A_______

A In the order that they are expected to be converted into cash

(collected)

B Alphabetically

C By Account Number
 D Largest dollar amounts first

E None of the listed answers is correct

88 After transactions have been recorded in the proper Journals, they are
transferred (posted) to ?________A_____

A General Ledger

B Work Sheet

C Trial Balance

D General Journal

E Financial Statements

89 Which of the following statements is not true ?______A_______

A Expenses increase Profits

B Expenses normally have debit balances

C Expenses decrease Owner's Equity

D None of the listed answers is correct

90 A credit is not the normal balance for which account listed below
?______A_______

A Dividend Account

B Revenue Account

C Liability Account

D Owner's Capital

91 Which accounts listed below are not a subcategory of Owner's

Equity._____A,B________

A Assets

B Liabilities

C Revenues

D Expenses
 E Dividends/Draws

92 Detailed records of products held for resale are not maintained using a
?_____A________

A Periodic Inventory System

B Perpetual Inventory System

C Both Systems maintain detail records

D Both Systems do not maintain detail records

93 A T-Account is ?______A_______

A A way of illustrating the basic form of an account

B A special account in the General Ledger

C A self-balancing account

D All of the listed answers are correct

94 If Beginning Inventory is understated, the effect of this error in the current

period is ?________C_____

A Net Earnings Understated

B No Effect

C Net Earnings Overstated

D None of the listed answers is correct

95 What is it called when you divide one number by another ?____A_________

A Ratio

B Equation

C Comparison

D All of the listed answers are correct

96 Put the following in the order performed.______A,B,C,D,E_______

A Analyze Source Document

 B Record in Journals

C Post General Ledger

D Prepare Trial Balance

E Prepare Financial Statements

97 When information is needed about customer balances owed and if any

payments are late ?_______A______

A an Accounts Receivable Ageing Report is prepared

B an Accounts Payable Ageing Report is prepared

C A Trial Balance is prepared

D a Balance Sheet is prepared

98 An account that normally requires an Adjusting Entry is Prepaid

Insurance._______A______

A True

B False

99 Prior to closing the Income Summary Account, the account has a credit
balance if revenues exceed expenses for the period._______A______

A True

B False

100 The Fully Expanded Accounting Equation is ?_______A______

A Assets=Liabilities + Beginning Owner's Equity+Additional Owner's

Investments+Revenues-Expenses-Draws

B Property=Property Rights

C Assets=Liabilities + Owner's Equity

D None of the listed answers is correct

101 Match the Accounting Rule with its definition.

Matching Choice
 Same accounting methods should be Consistency
applied in all periods

Businesses should record revenue Revenue Recognition

when earned

Expenses should be recognized and Matching Concept

matched with the revenues earned in
a period

Time periods are used to to record Accounting Period Concept

and report business transactions

Busineess is accounted for separately Business Entity Concept

from the owners

Business will continue operating and Going Concern Concept

not be sold or closed

Assets are recorded at their original Cost Concept

acquisition cost

102 A business making a profit will never have any Cash Flow
problems.______B_______

A True

B False

103 A Cash Flow Forecast is simply an estimate of the cash coming in and going
out during a period of time.____A_________

A True

B False

104 Which of the following is considered to be good Cash Management practices

?_______E______

A Maintaining an accurate check book

B Making daily Cash Deposits

C Preparing monthly Bank Reconciliations

D Preparing Cash Forecasts

 E All of the listed answers are correct

105 Granting liberal customer payment terms will normally result in improving a
business's cash flow._____B________

A True

B False

106 A _______________ ______________ is a document used to summarize

cash and checks received that are deposited in the bank.

_________Deposit Slip______________________

107 The abbreviation NSF stands for No Such Funds._______B______

A True

B False

108 Direct Deposits are ?_____A________

A Sent directly to the bank

B Sent to the business PO Box

C Sent to the business Street Address

D All of the listed answers are correct

109 A Cut-Off date is the date that the bank uses to prepare your Bank Statement
as of a specified date.___A__________

A True

B False

110 Petty Cash is sometimes referred to as an Imprest Fund.____A_________

A True

B False

111 Earnings from self employment from "flow thru" types of business
organizations are subject to special rules regarding Social Security and
Medicare Taxes._____A________
 A True

B False

112 A business is allowed to hire anyone that they want to.____B_________

A True

B False

113 Form W-4 summarizes an employee's earnings and deductions for a

year.______B_______

A True

B False

114 Form 940 is filed each quarter to report and summarize the deductions made
from employee wages.____A_________

A True

B False

115 An Automobile Dealer would normally be using what type of Costing Method
for assigning costs to units sold and on hand ?______A_______

A Specific Identification

B FIFO

C LIFO

D Average Cost

116 Which of the following increases Owner's Capial ?_____A,B________

A Revenue

B Owner Investments

C Expenses

D Draws

E None of the listed answers is correct

117 Unearned Revenues resulting from payments for future services is what type
 of account ?______A_______

A Liabilty

B Revenue

C Asset

D Expense

118 Given the following information, Beginning Balance of Unearned Revenues-

$1,000; Ending Balance of Unearned Revenues- $2,000; and Advance
Payments Received- $3,000 the amount of revenue earned for the period is
_________. Enter your answer as a whole dollar amount without the dollar
sign.

2,000
_______________________________

119 Given the following information, Beginning Balance of Prepaid Insurance-

$3,000; Ending Balance of Prepaid Insurance- $1,000; and the Amount
Charged to Insurance Expense-$2,500 the amount of Cash Payments for
insurance for the period is _____________. Enter your answer as a whole
dollar amount without the dollar sign.

____500___________________________

120 Given the following information, Beginning Cash- $5,000; Ending Cash-
$10,000; and Cash Receipts- $25,000 the amount of Cash Disbursements for
the period is __________. Enter your answer as a whole dollar amount
without the dollar sign.

______20,000_________________________

121 Given the following information, Beginning Owner's Capital- $25,000; Ending
Owner's Capital- $45,000; and Owners Draws- $15,000 the Profit for the
period is ___________________. Enter your answer as a whole dollar
amount without the dollar sign.
 ___35,000____________________________

122 A promissory note of $10,000 has an interest rate of 10% compunded

annually. The amount of interest for a year is ______________. Enter your
answer as a whole dollar amount without the dollar sign.

_________1,000______________________

123 Which of the following is not included in a manufacturer's product inventory

?_______A______

A Plant & Equipment

B Raw Materials

C Work-In-Process

D Finished Goods

124 Losses resulting from customers not paying the amounts they owe are
?____A_________

A Bad Debts

B Sales Returns & Allowance

C Sales Discounts

D Net Sales

125 Entries made at the end of a period to accrue revenues and expenses are
called ?______A_______

A adjusting entries

B closing entries

C correcting entries

D All of the listed answers are correct

126 Under the accrual method of accounting, the amount collected from
customer's accounts receivables should be recorded as
revenue._____B________
 A True

B False

127 Using the Periodic Inventory System , the balance in the Inventory Account
will change after each purchase and sale._____B________

A True

B False

128 Land, Buildings, and Equipment are often referred to as Fixed

Assets.____A_________

A True

B False

129 The amount of Depreciation calculated for Tax purposes can be different
than the amount calculated for Financial Reporting
purposes.____A_________

A True

B False

130 Checks written that have not cleared the bank are called
_________outstanding__________ checks.

_______________________________

131 The entries used to record Depreciation Expense are recorded in what
Journal ?_______A______

A General Journal

B Sales Journal

C Cash Receipts Journal

D Purchases Journal

E None of the listed answers is correct

132 Cash and other assets that can be converted into cash within a year are
 ___________ assets.

___________current____________________

133 Prepaid Expenses should appear in the Income Statemnent as a Current

Asset._______B______

A True

B False

134 Sales minus sales discounts, sales returns, and sales allowances is called
__________ sales.

____________net___________________

135 The account Petty Cash is normally debited when replenishing the Petty Cash
Fund.______B_______

A True

B False

136 Current Assets minus Current Liabilities is _________________ Capital.

_____________Working__________________

137 Which of the following accounts is a temporary account ?_______B,D______

A Prepaid Insurance

B Sales

C Accounts Receivable

D Bad Debt Expense

E Accounts Payable
 F Accrued Salaries & Wages

138 Which of the following accounts are Contra Accounts ?_______A,C______

A Allowance for Uncollectible Accounts

B Bad Debts

C Accumulated Depreciation

D Notes Payable

E Accounts Receivable

F Cash

139 Recording $1,000 of Advertising Expenses as Rental Expenses will cause the
Trial Balance to be out of balance._____B________

A True

B False

140 Sales Taxes collected but not yet paid should be reported as a Long-Term
Liability.______B_______

A True

B False

141 An error in counting and costing the Ending Inventory will not affect the
correct balance for Net Income.________F_____

A True

B False

142 Owner's Draws reduce the amount of Net Income reported for a Sole
Proprietorship.______B_______

A True

B False

143 Another term for Owner's Equity is Owner's ___Capital____________.

 _______________________________

144 ______________ and Owner's Equity are claims to the business's Assets.

Liabilities
_______________________________

145 When the terms of a sale are FOB Destination the freight charges are the
responsibility of the buyer._______B______

A True

B False

146 Sales Commissions are classified as ?_____A________

A Selling Expenses

B Administrative Expenses

C G & A Expenses

D All of the listed answers are correct

147 Given the following information, Total Assets- $150,000; Current Liabilities-
$50,000, and Working Capital- $60,000 the amount of Current Assets is
__________________. Enter your answer as a whole dollar amount without
the dollar sign.

110,000
_______________________________

148 Given the following information, Equipment Cost- $10,000; Depreciation

Expense for Year- $1,000; Year End Accumulated Depreciation- $5,000 the
book value of the equipment is __________________. Enter your answer as a
whole dollar amount without the dollar sign.

_____5,000__________________________

149 A negative cash balance will have a Credit Balance in the General
Ledger.________A_____
 A True

B False

150 A negative Cash Balance is classified as a Liability._____A________

A True

B False

151 A transaction is first recorded in a record called a ___________________.

________journal_______________________

152 Tha Cash Basis of Accounting is an acceptable accounting method per

Generally Accepted Accounting Principles (GAAP) ._____B________

A True

B False

153 The sum of the asset, expense, and draw accounts equals the sum of the
liability, revenue, and capital accounts._______A______

A True

B False

154 Given the following information, Total Assets- $50,000; Current Assets-
$30,000; Current Liabilities- $20,000 and Net Assets- $25,000 the Total
Amount of Liabilities is ______________. Enter your answer as a whole dollar
amount without the dollar sign.

__________25,000_____________________

155 Given the following information, Net Sales-$100,000 and Cost Of Goods Sold-
$50,000 the Gross Profit Percentage is ?_____A________

A 50%

B 50,000
 C 100%

D 150000

E 50

F 50.00

156 Advance Payments for Services not yet performed is ?_____A________

A a Liability

B an Asset

C Revenue

D an Expense

157 A buiness purchased Land with an appraised value of $200,000 for $180,000;
the Land is recorded in the books at $200,000._______B______

A True

B False

158 You have been asked to calculate the value of your company's inventory
using LIFO. What information do you need ?_____A________

A The costs and quantities of the oldest items in inventory

B The average cost and quantities of the items in inventory

C The costs and quantities of the newest items in inventory

D None of the listed answers is correct

159 What is the correct sequence of the accounting cycle ?____A_________

A Source documents, journal, ledger, trial balance, financial

statements

B Trial balance, source documents, journal, ledger, financial

statements

C Souce documents, ledger, journal, trial balance, financial

statements

D None of the listed answers is correct

160 Offering early payment discounts will likely increase the time it takes for
customers to pay.____B_________

A True

B False

161 Given the following information, Cash- $5,000; Accounts Receivable-

$10,000; Buildings- $100,000; Goodwill- $20,000; Inventory- $25,000;
Equipment- $50,000 the amount of Current Assets is ______________. Enter
your answer as whole dollar amounts without the dollar sign.

40,000
_______________________________

162 Which of the following are classified as fixed costs?_______C,D______

A Utilities

B Raw Materials

C Depreciation

D Building Rent

E Sales Tax

F Commissions on Sales

163 Your company purchased Equipment July 1, xxxx at a cost of $6,000 with a
useful life of 5 years and no salvage value. The amount of depreciation using
straight-line depreciation for the first year is ______________. Enter your
answer as whole dollar amounts without the dollar sign.

_____600__________________________

164 A source document used to record merchandise returned by a customer is

called a credit memorandum (memo)._______A______

A True

B False

165 Assigning costs to Inventory using the FIFO Method uses the most recent
 (newest) costs for calculating the value of the ending
inventory.______A_______

A True

B False

166 Using the Direct Write Off method for bad debts involves recording bad debt
expense at the time an account is determined to be
uncollectible.___A__________

A True

B False

167 If a seller applies a credit memorandum (memo) to a customer's account,

which of the following is true.______A_______

A Decreases the amount the customer owes

B Increases the amount the customer owes

C No effect on what the customer owes

D None of the listed answers is correct

168 If a company applies a debit memorandum (memo) to a supplier's account

which of the following is true._____A________

A The amount owed the supplier is decreased

B The amount owed the supplier is increased

C No effect on the amount owed to the supplier

D None of the listed answers is correct

169 Given the following information, you are asked to prepare an invoice for the
following items; 10-units of Product X @ $10.00 ea; 5-units of Product Y @
$20.00 ea and 1-unit of Product Z @ $50.00. Sales Tax is 10% and Product Z is
Exempt. The total invoice amount including sales tax is ____________. Enter
your answer as whole dollar amounts without the dollar sign.

___270____________________________

170 The Sales Journal records all sales of goods and services on credit; but not
 sales for cash._______A______

A True

B False

171 Accrued Salaries and Wages are ?______A_______

A Salaries and Wages earned but not paid

B Unearned Salaries and Wages

C Salary and Wages Advances

D None of the listed answers is correct

172 Which of the following is not a Current Asset ?_______A______

A Patents

B Cash

C Inventory

D Accounts Receivable

173 The Cost Of Goods Availabe For Sales is allocated between ?___A__________

A Cost Of Goods Sold and Ending Inventory

B Cost Of Goods Sold and Beginning Inventory

C Purchases and Ending Inventory

D Purchases and Beginning Inventory

174 The Cost Of Goods Available for Sales consists of the ?______A_______

A cost of beginning inventory and the cost of goods purchased

B cost of beginning inventory and the cost of ending inventory

C cost of ending inventory and the cost of goods purchased

D none of the listed answers is correct

175 International Accounting normally does not allow which method of assigning
costs to inventory ?________A_____
 A LIFO

B FIFO

C Average Cost

D All the listed answers are permitted

176 An account balance is ?_____A________

A The beginning balance of an account plus increases less decreases

B The total of the credit side

C The total of the debit side

D Always increased by debits

E Always increased by credits

177 If the liabilities of a business increased $10,000 and the owner's equity
decreased $5,000 during a period of time, the balance of the assets
?____A_________

A Increased $5,000

B Decreased $5,000

C Can't be determined

D Increased $15,000

E Decreased $15,000

178 Which of the following account(s) appear in a Balance Sheet

?_____A,D,E,F________

A Cash

B Rent Expense

C Sales

D Common Stock

E Fees Earned

F Notes Payable
 G Dividends

179 Businesses can take the following form(s)._______A,B,C,D______

A Sole Proprietorship

B Partnership

C LLC

D Corporation

180 External users of accounting information include ?_____D________

A Shareholders

B Customers

C Creditors

D All of the listed answers are correct

181 Return On Assets is calculated by dividing Net Income by Average Total

Assets.______A_______

A True

B False

182 Given the following information, Beginning Retained Earnings- $15,000;

business had a Net Loss of $5,000; Common Stock- $40,000; and no
dividends were paid, the Ending Retained Earnings Balance is
_____________. Enter answer as whole dollar amount with no dollar sign.

____10,000___________________________

183 The Time Period Principle assumes that a business's financial activities can be
divided into which of the following time periods ?_______A______

A All of the listed answers are correct

B Months
 C Quarters

D Years

184 Adjusting entries affect ?____A_________

A Both Income Statement and Balance Sheet Accounts

B Only Balance Sheet Accounts

C Only Income Statement Accounts

D Neither Balance Sheet Accounts or Income Statement Accounts

185 If a company failed to record the Depreciation Expense for a period

?_____A________

A Expenses are understated

B Revenues are overstated

C Liabilities are understated

D Assets are understated

186 The Current Ratio is calculated by subtracting Current Liabilities from Current
Assets._______B______

A True

B False

187 Which of the following assets is not Depreciated ?_____A________

A Land

B Computers

C Store Fixtures

D Buildings

E Equipment

188 A company's Inventory Balance does not include goods on

consignment.______A_______

A True
 B False

189 Goods In Transit are included in the buyer's Inventory when

?____A_________

A the buyer is responsible for the freight

B the seller is responsible for the freight

C when the goods are shipped FOB Destination

D All of the listed answers are correct

190 Quick Assets include cash, current accounts receivable, and short-term
investments.______A_______

A True

B False

191 A closing entry would close any balance in ?_____C________

A Cash

B Accounts Receivable

C Sales

D Accounts Payable

E Accumulated Depreciation

192 The payment of a liability is recorded by a debit to the liability account and a
credit to the owner's capital account.______B_______

A True

B False

193 The rules for of debits and credits for expense accounts are not the same as
the rules for asset accounts._______B______

A True

B False

194 Revenue increases Owner's Equity and the increases in Revenue are recorded
with a Debit._____B________
 A True

B False

195 A corporation is the easiest form of business to organize.______B_______

A True

B False

196 The Financial Statement that summarizes information about the cash inflows
and outflows during a period is ?___A__________

A Statement Of Cash Flows

B Income Statement

C Balance Sheet

D Capital Statement

E Statement of Retained Earnings

197 Which of the following representations of the Accounting Equation is not

correct ?______A_______

A Assets = Liabilities - Owner's Equity

B Assets = Liabilities + Owner's Equity

C Assets - Liabilities = Owner's Equity

D Assets - Owner's Equity = Liabilities

198 The Gross Profit Method and the Retail Inventory Method are both methods
for estimating inventory amounts._____A________

A True

B False

199 Inventory Turnover is an activity ratio calculated by dividing Cost Of Goods

Sold by the Average Inventory for a period._____A________

A True

B False

200 The personal assets of the owner will not appear on the company's Balance
 Sheet because of which principle._____C________

A Historical Cost

B Monetary Unit

C Economic Entity

D Full Disclosure

E Conservatism

201 External users of financial statements include ?_____A________

A All of the listed answers are correct

B Creditors

C Customers

D Labor Unions

E Investors

202 Which account is not included in the Income Statement ?____A_________

A Accumulated Depreciation

B Depreciation Expense

C Sales Revenue

D Advertising Expense

E Interest Expense

203 If Sales are $100,000 and the Gross Profit Margin is 20%, the amount for
Cost Of Goods Sold is _____________. Enter your answer as a whole dollar
amount without the dollar sign.

_________80,000______________________

204 If a company has a balance of $100,000 in Owner's Equity, which of the

following statements is true?____A_________
 A assets minus liabilities equals $100,000

B total assets equal $100,000

C net income equals $100,000

D a total of $100,000was invested by the owner

E none of the listed answers is correct

205 On which Financial Statement would the description "For The Period Ending"
not appear ?____A_________

A Balance Sheet

B Income Statement

C Statement of Owner's Equity

D Statement Of Cash Flows

206 What does the income statement report ?______A_______

A profitability

B liquidity

C solvency

D all of the listed answers are correct

207 Which of the following types of organizations is a "flow thru" type of

organization in regards to income taxes ?_____A,B,D,E________

A Partnership

B LLC

C Corporation

D Sub-S Corporation

E Sole Proprietorship

208 The accounts known as Real Accounts are ?________A_____

A Permanent Accounts
 B Temporary Accounts

C Reported in the Income Statement

D Begin with a zero balance after the books are closed

209 The accounts known as Nominal Accounts are ?_____A________

A are temporary accounts

B are permanent accounts

C have balances in the account after closing the books

D none of the listed answers is correct

210 Real Accounts are also referred to as Permanent Accounts.______A_______

A True

B False

211 What Accounting Rule requires deprecation expenses to be recorded

?_________A____

A Matching Rule

B Historical Cost Rule

C Conservatism Rule

D Entity Rule

212 The account Unearned Revenue is reported in ?_____A________

A Balance Sheet as a Liabilty

B Income Statement

C Balance Sheet and Income Statement

D Balance Sheet as an Asset

213 Failure to record Accrued Wages will not affect the balance of Total
Assets._______A______

A True
 B False

214 A service company that does not sell any products Income Statement does
not contain which of the floowing ?_____A________

A Cost Of Goods Sold

B Revenues

C Expenses

D Net Profit/Loss

215 The followwing three items are sold - Item 1 $100, Item 2 $200, and Item 3
for $300. If the Sales Tax Rate is 10% and Item 3 is Exempt, the amount for
Sales Tax is ___________. Enter your answer in whole dollar amounts
without the dollar sin.

30
_______________________________

216 If Ending Inventoy is understated, then Net Income is

understated.______A_______

A True

B False

217 If Ending Inventory is overstated, then Net Income is

overstated.______A_______

A True

B False

218 If Beginning Inventory is overstated, then Net Income is

understated._______A______

A True

B False

219 If Beginning Inventory is understated, then Net Income is

overstated._____A________

A True
 B False

220 The Cost Of Inventory is deducted in the Income Statement when

?______A_______

A Sold

B Purchased

C Paid For

D None of the answers are correct

221 All of the following are Short Term Liquid Assets except ?_____A________

A Inventory

B Cash

C Accounts Receivable

D Certificates of Deposit

222 If Current Liabilities are understated in the Balance Sheet, what other
category in the Financial Statements is misstated ?_____A________

A Expenses

B Revenues

C Total Assets

D Current Assets

223 Which of the following liabilities is an example of a liability that is most likely
estimated ?______A_______

A Vacation Wages Payable

B FICA Taxes Payable

C Employee Income Tax Withheld

D Accounts Payable

224 Expenditures for property, plant, and equipment are charged to long-term
asset accounts because of which Accounting Rule ?_____A________
 A Matching Rule

B Cost-Benefit Rule

C Conservatism Rule

D Monetary Rule

E Double-Entry Rule

225 A document issued conveying ownership in a corporation is called a stock

certificate.______A_______

A True

B False

226 Withdrawal of money from a sole proprietorship by the owner is not an

expense but a reduction of capital._____A________

A True

B False

227 Beginning Inventory plus Purchases equals Sales.___B__________

A True

B False

228 Beginning Inventory plus Purchases equals Cost Of Goods

Sold.______B_______

A True

B False

229 Bad Debt Expense appears in the Balance Sheet and the Allowance for
Uncollectibles appears in the Income Statement.____B_________

A True

B False

230 Which of the following is not a source of Cash ?____A_________

A Purchase of Goods for Cash

 B Cash Sale

C Payment on a Customer's Account

D Loan from a Bank

231 The most liquid asset and subject to theft and fraud is _______________.

___________cash____________________

232 All disbursements except petty cash payments should be made by

__________.

check
_______________________________

233 Which Form will have information about an employee's number of

exemptions ?_________A____

A W-4

B W-2

C 940

D 941

234 When usage rather than time is the key factor, the straight-line method of
depreciation is the preferred method to use.____B_________

A True

B False

235 Which of the following is an Asset ?_______A______

A Machinery Owned

B Overdrawn Bank Balance

C Amount Owed to A supplier

D All of the listed answers are correct

236 Which of the following is a Liability ?______A_______

A Overdrawn Bank Account

B Amount Owed By A Customer

C Owned Building

D Owned Patent

237 Which of the following Equations are not correct ?____C,D_________

A Assets-Liabilities=Owner's Equity

B Assets-Liabilities=Net Worth

C Liabilities-Capital=Assets

D Owner's Equity=Assets+Liabilities

E Assets=Liabilities+Owner's Equity

238 Which of the following statements is correct ?____A_________

A Record an increase to an Asset with a debit

B Record a decrease to Capital with a credit

C Record an increase to a Liability with a debit

D Record a decrease to a Liability with a credit

E Record an increase to Revenue with a debit

239 If an incorrect amount, such as $900 is recorded as $90 in the correct

accounts, the Trial Balance will not balance._______B______

A True

B False

240 If a company's Gross Profit % is 50% and and Cost Of Goods Sold is $200,000
the Sales Amount is ____________. Enter your answer in a whole dollar
amount without the dollar sign.

________400,000_______________________
241 The purchase of Equipment is charged to an Equiipment Expense
Account._______B______

A True

B False

242 If an item sells for $10 and costs $5, the Gross Profit % is _______ %.

__________50_____________________

243 If an item costs $10 and you want a 50 % Gross Profit on the item, the item
should sell for __________. Enter your answer as a whole dollar amount
without a dollar sign.

__________20_____________________

244 A firm's Gross Profit % is 20%. It's markup on cost is ?_______A______

A 25 %

B 16.7 %

C 22 %

D 30 %

245 The mark-up on the cost of an item that costs $500 and sells for $600 is
?_____A________

A 20 %

B 25 %

C 16.7 %

D 33.3 %

E 66.7 %

246 If cost is $1.00 and you mark up cost 100% to arrive at your selling, the sales
price is ?_______A______
 A $2.00

B $1.50

C $3.00

D None of the answers is correct

E $1.25

F $1.75

247 Goodwill is classified as ?____A_________

A An Intangible Asset

B Property, Plant, & Equipment

C Current Liabilty

D Owner's Equity

E Current Asset

248 A Prior Period Adjutment is a correction of an error posted to the current

period.______B_______

A True

B False

249 The balance in the Retained Earnings Account represents the total profits
and/or losses and any distributions to owners since
the business began operations.______A_______

A True

B False

250 When an Asset increases because a Liabilty increases,the Asset is credited

and the Liability is debited.____B_________

A True

B False

251 Which of the listed increase Owner's Equity ?____A,B_________

 A Owner invests money in his business

B Business has a profit

C Business incurs an expense

D Business borrows money froma bank

E Business collects money on a customer's account

F Business purchases an asset

252 When a business provides goods or services before receiving the cash
payment, what type of asset is created ?_______A______

A Accounts Receivable

B Accounts Payable

C Property & Equipment

D Customer Advance

253 Quick Assets include Cash, Marketable Securities, Receivables, and

Equipment._____B________

A True

B False

254 The Current Ratio is calculated by subtracting Current Liabilities from Current
Assets._____B________

A True

B False

255 The money used to start a business is known as ?_______A______

A Capital

B Income

C Profit

D Draws

E
256 When goods or services are paid for at the time of sale, it's called a
____________ transaction.

________cash_______________________

257 Recording in the left hand side of an account is known as crediting the
account.___B__________

A True

B False

258 The party to whom a check is made payable to is called the

drawer.______B_______

A True

B False

259 The major purpose of a Trial Balance is to locate transactions that have not
been recorded.________B_____

A True

B False

260 Given the following information; Sales- $50,000, Expenses-$20,000, and a

Gross Profit of 20% of Sales, The Cost Of Sales Amount is ________________.
Enter your answer as a whole dollar amount without the dollar sign.

40,000
_______________________________

261 If the Begiining Inventory and the Ending Inventory are the same, Cost of
Goods Sold is equal to the Purchases for the period.________A_____

A True

B False

262 The amount of Working Capital and Net Current Assets is the
same.______A_______
 A True

B False

263 Given the following information; Fixed Assets- $ $15,200, Current Assets-
$$7,800, Owner's Capital- $19,900,and Long-Term Liabilities- $1,000 the
amount of Current Liabilities is _______________.Enter your answer as a
whole dollar amount without the dollar sign.

_______2,100________________________

264 Sales Returns are added to Sales in computing Net Sales._______B______

A True

B False

265 Interest earned on a Certificate of Deposit is normally recorded in what

Journal ?________A_____

A General Journal

B Purchases Journal

C Cash Receipts Journal

D Cash Payments Journal

266 Given the following information; Beginning Inventory- $100,000, Ending

Inventory- $80,000, and Cost of Goods Sold- $90,000 the amount of
Purchases for the period is _____________. Enter your answer as a whole
dollar amount without the dollar sign.

______________70,000_________________

267 Which of the following would not be paid from a Petty Cash Fund
?___A__________

A Salaries & Wages

B Postage
 C Cleaning Supplies

D Office Supplies

268 If the amount of Cash plus the Amount of Petty Cash Vouchers are less than
the Petty Cash Funds normal balance, a Shortage has
occured.______A_______

A True

B False

269 Given the following information; Beginning Accounts Receivable-

$100,000,Ending Accounts Receivable- $90,000,Sales On Account-$$110,000
the amount of Cash Collected during the period is _____________. Enter
your answer as a whole dollar amount without the dollar sign.

_________120,000______________________

270 A Credit Balance in a customer's account can result from which of the
following ?_____A________

A Return of a product sold

B Sale made for Cash

C Sale made on Account

D All of the listed answers are correct

271 Raw Materials and Manufacturing Wages are examples of ?____A_________

A Direct Costs

B Indirect Costs

C Manufacturing Overhead

D Period Operating Expenses

272 Which of the folloein is not a Prime Cost ?______A_______

A Depreciation

B Direct Labor
 C Raw Material

D None of the listed answers is correct

273 Valuing Inventory at lower of cost or market is an application of what

Accounting Rule ?______A_______

A Conservatism

B Matching

C Materiality

D Double Entry

274 Income and Expense Accounts are always associated with a Period Of
Time.________A_____

A True

B False

275 THe most common reason for the opportunity to commit fraud is that too
much authority or responsibility is give to one employye.________A_____

A True

B False

276 Debt Ratios are also called Leverage Ratios.________A_____

A True

B False

277 In Cost Accounting which of the following is not a Period Expense

?______A_______

A Shop Foreman Wages

B Sales Commissions

C Advertising

D Interest Expense

278 Not any Service Type of businesses need a Cost Of Sales

Account.______B_______
 A True

B False

279 What form is used to verify that a job applicant can be legally hired
?_____A________

A I-9

B W-2

C W-4

D 941

280 An Exempt Employee is an employee who is exempt from the Fair Labor
Standards Act._____A________

A True

B False

281 Salaried Employees are normally paid based on the nuber of hours they
work.____B_________

A True

B False

282 ____________ ________________ are used as an aid in preparing Financial

Statements.

____Work Sheets___________________________

283 Accounting is sometimes referred to as the Language Of

Business._____A________

A True

B False

284 Which of the following would appear in a company's Balance Sheet

?_____C________

A Vehicle owned by an owner

 B Money in the Owner's Personal Checking Account

C Building owned and used by the business

D Employees

E Money in the Business Checking Account

285 The amount of Revenue is always equal to the amount of Cash

Receipts._____B________

A True

B False

286 Which of the following affect the Net Income of a business using the accrual
basis ?___A,B,C__________

A Cash Sale to a customer

B Charge Sale to a customer

C Sales Return from a customer

D Cash collected from a Sale On Account

287 Generally Accepted Accounting Principles(AAP) require a Budget as one of

the Formal Financial Statements prepared._____B________

A True

B False

288 Which of the following Financial Statements discloses the total amount of
Fixed Assets ?_______A______

A Balance Sheet

B Income Statement

C Statement of Owner's Capital

D Cash Flow Statement

289 The term "Bottom Line" refers to which Financial Statement

?_____A________

A Income Statement
 B Balance Sheet

C Cash Flow Statement

D Statement of Owner's Capital

E None of the listed answers is correct

290 Which of the following statements contains the term Gross Profit
?______A_______

A Income Statement

B Balance Sheet

C Statement of Owner's Capital

D Cash Flow Statement

E None of the listed answers is correct

291 Net Worth, Owner's Equity,and Fund Balances are all representations of
Residual "Owner" Claims.____A_________

A True

B False

292 What Account links the Income Statemnt to the Balance Sheet
?____A_________

A Owners Capital Account

B Cash Account

C Accounts Payable Account

D Fixed Asset Account

293 The Book Value of Fixed Assets is always the same as their Market
Value.______B_______

A True

B False

294 The Cash Method of Accounting is being used when the accounts Accounts
Receivable and Accounts Payable are being used._____B________
 A True

B False

295 Which of the following asset accounts is the most liquid ?_____A________

A Cash

B Inventory

C Equipment

D Accounts Receivable

E Notes Receivable

296 Total Variable Costs stays the same no matter how many units are
produced._______B______

A True

B False

297 A business's Cash Flow will improve with a longer Cash Conversion
Cycle.____B_________

A True

B False

298 Incurring debt obligations is always bad._____B________

A True

B False

299 The Balance Sheet, Income Statement, and Owner's Capital Statement are
summaries of the General Ledger Account Balances.____A_________

A True

B False

300 The term "Bottom Line" refers to ?______A_______

A Net Profit/Loss

B Owner's Capital
C Net Assets

D Net Worth