Accounting Jeopardy

Journal Entries

100

Is the following statements true or false? A Journal Entry does not require a brief explanation of a transaction. 

False

200

What is the purpose of Journal Entries?

Its purpose is to keep a day-to-day record of a business and its transactions.

300

This journal is used to record the opening of accounts for a business.

General Journal

400

This book of original entry records only credit sales that have been returned to a business.

Return Inwards Journal

500

The book of original entry used for recording small cash transactions

Petty Cash Book

Mixed Category

100

The formula used to find inventory turnover

Cost of Sales / Average Inventory

200

Source document used to record transactions that are settled for immediately

Receipt

300

The normal balance for revenue

Credit

400

The statement helps check for accuracy of the double entry process

Trial Balance

500

This type of error occurs when the amounts are entered correctly but in the wrong type of account

Error of principle

Balance Sheet

100

Does the balance sheet heading specify a: period of time or point in time?

point in time

200

Another name for an owner's equity

Capital 

300

The order of liquidity for current assets

cash in hand, cash in bank, accounts receivable, inventory

400

This item in the balance sheet indicates liquidity

Working Capital

500

The effect of a net loss on captial

Decrease

Ratios 1

100

The ratio found by Net Profit divided by Capital Employed 

Return on Capital 

200

State the formula for Quick (Acid-Test) Ratio.

Quick (Acid-Test) Ratio = (Cash + Short-term invest. + Net Curr. Receiv.) / Total Curr. Liab.

300

What is the Current Ratio used for?

To give an idea of a company’s ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables).

400

This ratio is found by comparing the Gross Profit in relation to the Cost of Sales

Mark Up

500

What is the gross profit for a business that has a mark up of 10%, opening inventory of $32 000, Closing inventory of $20 000 and Purchases of $228 000?

$24 000

Ratios 2

100

Average Stock is $4 500, Opening stock is $2 000. What is the value of the closing stock? 

$ 7 000

200

Given Sales $5 000, Expenses $1 200. What is the Net Profit Margin? 

76%

300

Cost of Goods Sold divided by the Average Stock is the formula for

Rate of Stock Turnover

400

The value of closing stock when Opening Stock is $800, Average Stock is $750. 

$700

500

Calculate the value of a company's current liabilities when the business has a current ratio of 2:1. Current assets are valued at $5 000$ closing inventory is $500. 

$ 2 500