Bookkeeping Exam #2

Which of the following would be considered a fiscal year?

A) July 1, 20- to June 30, 20-
B) April 1, 20- to January 31, 20-
C) October 1, 20- to August 31, 20-
D) January 1, 20- to December 31, 20-

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Trial Balance Debit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Trial Balance Credit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Adjusted Trial Balance Debit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Adjusted Trial Balance Credit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Income Statement Debit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Income Statement Credit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Balance Sheet Debit.

List the classifications of the accounts that occupy each column of a ten-column work sheet.

Balance Sheet Credit.

Depreciation is...

A) An expense based on the expectation that an asset will gradually decline in usefulness due to time, wear and tear, or obsolescence; the cost of the asset is therefore spread out over its estimated useful life. A part of depreciation expense is apportion to each fiscal period.
B) Any period of time covering a complete accounting cycle, generally consisting of 12 consecutive months.
C) The principle that the expenses for one time period are matched up with the related revenues for the same period.
D) A means of calculating depreciation in which the cost of an asset, less any trade-in value, is allocated evenly over the useful life of the asset.

Accumulated Depreciation, Equipment, is shown as...

A) a liability on the balance sheet.
B) a deduction from net income on the statement of owner's equity.
C) a contra account on the balance sheet.
D) an expense on the income statement.

Accrued wages are that...

A) wages that have been neither earned nor paid.
B) wages that have been paid.
C) wages that have been earned but not paid.
D) wages that were earned and have been paid.

The type of account and normal balance of Accumulated Depreciation are...

A) contra asset, credit.
B) asset, credit.
C) contra asset, debit.
D) asset, debit.

The adjusting entry to record depreciation of equipment is...

A) debit Depreciation Expense, credit Equipment.
B) debit Depreciation Expense, credit Depreciation Payable.
C) debit Depreciation Expense, credit Accumulated Depreciation.
D) debit Accumulated Depreciation, credit Depreciation Expense.

Porter Company bought equipment on January 3 of this year for $10,000. At the time of purchase, the equipment was estimated to have a useful life of nine years and a trade-in value of $1,000 at the end of nine years. Using the straight-line method, the amount of one year's depreciation is...

A) $1,111.11.
B) $1,222.22.
C) $9,000.
D) $1,000.

The proof that the debits and credits in the ledger are equal is called...

A) the journal.
B) the income statement.
C) the trial balance.
D) the statement of owner's equity.

In the accounting process the second step is to...

A)  Posting to the Ledger.
B)  Identifying and Analyzing Business Transactions.
C)  Recording in the Journals.
D)  Unadjusted Trial Balance.

When posting from the journal to the ledger, the accountant failed to post a $42 debit to Cash. The effect of this error will be that...

A) the amounts in the journal will be in error.
B) the Cash account balance will be overstated.
C) the trial balance will not balance.
D) the total debits in the trial balance will be larger than the total credits.

A cash payment of $640 on account was recorded as a $460 debit to Accounts Payable and a $460 credit to Cash. The necessary correcting entry is...

A) debit Cash, $180; credit Accounts Receivable, $180.
B) debit Accounts Receivable, $180; credit Cash, $180.
C) debit Cash, $180; credit Accounts Payable, $180.
D) debit Accounts Payable, $180; credit Cash, $180.

A payment of $260 was received from a charge customer and recorded and posted as $206. The necessary correcting entry is...

A) debit Cash, $54; credit Income from Services, $54.
B) debit Cash, $54; credit Accounts Receivable, $54.
C) debit Cash, $54; credit Accounts Payable, $54.
D) debit Accounts Receivable, $54; credit Cash, $54.

The income statement debit column of the worksheet contains...

A) Revenues.
B) Accumulated Depreciation.
C) Liabilities.
D) Expenses.

Which of the following accounts is not adjusted?

A) Accumulated depreciation.
B) Wages payable.
C) Cash.
D) Owner's Capital.

Over a period of time, if total assets increase by $27,000 and total liabilities increase to $7,000 then Owner's Equity will be increased by...

A) $34,000.
B) $7,000.
C) $27,000.
D)  $20,000.

True/False.

Capital represents the owner's investment or equity in a business.
True False

True/False.

Accounts Receivable is considered an asset.
True False

True/False.

Assets are things of value owned by a business entity.
True False

True/False.

Liabilities represent amounts owed to creditors.
True False

True/False.

In the fundamental accounting equation, assets are added to liabilities.
True False

True/False.

Both sides of the fundamental accounting equation must always be equal.
True False

True/False.

The only way that the fundamental accounting equation can stay in balance is by adding or subtracting equal amounts from both sides of the equation.
True False

True/False.

A credit signifies increases in liabilities, capital and revenue and decrease in assets, drawing and expenses.
True False

True/False.

Revenue has the effect of decreasing Owner's Equity.
True False

True/False.

The left side is always the debit side.
True False

Which of the following accounts should be closed to the Income Summary account at the end of the fiscal year?

A) Wages Payable.
B) Rent Expense.
C) Accumulated Depreciation.
D) The Owner's Drawing Account.
E) Equipment.

Closing entries are prepared to close which of the following?

A) Accumulated Depreciation.
B) Payables & Receivables.
C) Wages Payable.
D) Temporary Accounts.
E) Owner's Capital Account.

If expenses are greater than revenue, the income summary account will be closed by a debit to what?

A) Cash; credit Income summary.
B) Income summary; credit Drawing.
C) Income summary; credit Cash.
D) Capital; credit Income summary.
E) Income summary; credit Capital.

Which of the following account will have a remaining balance after the closing process is completed?

A) Depreciation Expense.
B) Drawings.
C) Income from Services.
D) Rent Expense.
E) Owner's Capital.

Financial statement prepared through the fiscal year for less than 12 months are called...

A) External.
B) Internal Statement.
C) Interim Statement.
D) Temporary.

A business pays weekly wages for $20,000 on Friday for a 5-day week. If a fiscal period ends on Wednesday, the adjusted entry is what?

A) Debit Purchase Expense $12,000; Credit Drawings $12,000.
B) Debit Wages Payable $12,000; Credit Wages Expense $12,000.
C) Debit Drawings.
D) Debit Wages Expense $12,000; Credit Wages Payable $12,000.

Which of the following accounts will not be involved in the closing process?

A) Advertising Expense.
B) Income from Services.
C) Rent Expense.
D) Drawings.
E) Salaries Payable.

Which of the following are all temporary accounts?

A) Liabilities, Revenues & Expenses.
B) Revenues, Drawings & Owner's Equity.
C) Revenues, Expenses & Owner's Drawings.
D) Liabilities & Assets
E) Assets, Liabilities & Owner's Drawings.

Step 1 in the accounting cycle.

Step 2 in the accounting cycle.

Step 3 in the accounting cycle.

Step 4 in the accounting cycle.

Step 5 in the accounting cycle.

Step 6 in the accounting cycle.

Step 7 in the accounting cycle.

Step 8 in the accounting cycle.

Step 9 in the accounting cycle.