Adjusting & Closing Entries
Purchases & Cash Payments
Sales & Cash Receipts
General & Subsidiary Ledgers
Accounting for This
100
"Income Summary" is this type of account.
What is a temporary account?
100
Good that a business purchases to sell are called...
What is merchandise?
100
The amount of sales tax collected is a ___________ until it is paid to the government agency.
What is a liability?
100
A ledger that summarizes a single general ledger account such as accounts receivable or accounts payable.
What is a subsidiary ledger?
100
What does GAAP stand for?
What is Generally Accepted Accounting Principles?
200
Journal entries to update general ledger accounts at the end of a fiscal period.
What are adjusting entries?
200
True or False: Supplies purchased are recorded in the purchases account.
False: The purchases account is only used to record the cost of merchandise purchased.
200
Sales tax payable has this type of normal balance.
What is a credit balance?
200
List four asset accounts and state what type of normal balance they have (credit/debit).
What are cash, supplies, prepaid insurance, and accounts receivable? Assets have a normal debit balance!
200
List three types of special journals.
What are purchases journal, cash payments journal, sales journal, cash receipts journal, and general journal?
300
Only general ledger accounts with ___________ are included on a post-closing trial balance.
What is a balance?
300
A reduction in the list price granted to some customers of a business.
What is a trade discount?
300
Jeffrey purchased computer equipment from Hobby Shack and his sales invoice listed a sales price of $1,250; but he only paid $1,175 after receiving a sales discount for early payment. What sales discount rate did he receive?
What is 6%? 1,175/1,250 = 0.94, or 94% of original price. Thus 100% - 94% = 6%
300
Supplies that are bought on account are recorded in which journal?
What is the general journal? Supplies are not purchases; DO NOT go in purchases journal!
300
Which special journal has these special amount columns: General (debit/credit), AR credit, sales credit, sales tax payable credit, sales discount debit, and cash debit?
What is the cash receipts journal?
400
The income summary account will have this type of balance (credit/debit) when revenue is greater than expenses, resulting in a net income.
What is a credit balance? Income summary account doesn't have a normal balance side.
400
Suppose that Huskey's Sporting Goods purchased soccer shoes from Nike that cost $100 each, and that a 35% markup was added in order for the business to make a profit. What is the sales price for these shoes?
What is $135? $100 x 0.35 = $35 markup + $100 = $135
400
Credit given back to a customer for the sales price of returned merchandise.
What is a sales return?
400
The subsidiary ledger containing only accounts of vendors from whom your business makes purchases on account.
What is the accounts payable ledger?
400
The location where adjusting entries are first analyzed and planned prior to entering them in the general or special journals.
What is a work sheet?
500
List and describe the 8 phases of the accounting cycle.
What are (1) analyze transactions, (2) journalize, (3) post, (4) prepare worksheet, (5) prepare financial statements, (6) journalize adjusting and closing entries, (7) post adjusting and closing entires, (8) prepare post-closing trial balance.
500
An account that reduces a related account on a financial statement. Example - Purchases account is reduced by the purchases discount _________ account.
What is a contra account?
500
Proving your sales journal requires you to subtract the ____________ and ________________ from the _______________ account.
What is subtracting the sales credit and sales tax payable credit accounts from the accounts receivable debit account?
500
Income statement and balance sheet accounts are sorted and summarized in this location.
What is the general ledger?
500
The terms of sale 2/15, n/30 means what type of sales discount is being offered?
What is a 2% invoice price reduction if paid within 15 days, otherwise the net amount is due in 30 days?
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