What are the two primary objectives of management?
To achieve profitabitliy and liquidity.
100
The matching rule is most closely related to this type of accounting.
Accrual method
100
In the accounting cycle, closing entries are prepared before adjusting entries. True or False
False
100
What type of account is sales discounts, and what is the normal balance?
A contra revenue account with a debit balance
100
When recording in a special purpose journal, the column total of Other Accounts is never posted, true or false?
True
200
This means having enough funds on hand to pay debts when they are due.
What is liquidity?
200
When are office supplies expensed?
They are expensed when they are used up.
200
Which of the following accounts is not closed during the closing process?
A) Owner's capital
B) Commissions revenue
C)Income summary
D) Owner's withdrawals
A) Owner's capital
200
Materiality is always $1,000? True or false
False
200
What account is not used in a perpetual inventory system?
A) Cost of goods sold
B) Purchases
C) Sales revenue
D) Merchandise inventory
D) purchases
300
This is another name for the book of original entry.
The general journal.
300
Accumulated depreciation is classified as what type of account?
Contra account
300
Which of the following is not a permanent account?
A) Depreciation expense - building
B) Owner's capital
C) Accounts receivable
D)Supplies
A) Depreciation expense - building
300
What is gross margin?
Gross margin is the difference between net sales and cost of goods sold.
300
Which is not considered in computing net cost of purchases?
A) Purchases
B) Purchase returns & allowances
C) Freight paid on goods shipped to customers
D) Freight paid on purchased goods
C) Freight paid on goods shipped to customers
400
A resource belonging to the company and having future benefit to the company is called this.
What is an asset.
400
Which is an example of a deferral?
A) interest expense incurred but not paid.
B) Estimated property taxes for the year.
C)Fees earned but not collected.
D) A commission collected in advance.
D
400
Which of the following accounts might appear in the adjusted trial balance but not the post-closing trial balance? A) Owner's capital
B) Unearned revenue
C) Depreciation expense
D) Office supplies
C) Depreciation expense
400
When expenses exceed revenues the company has a ______
Net loss
400
A return of a purchase for credit is recorded in which journal?
General journal
500
What is the primary purpose of the trial balance?
It makes sure that debit and credit are equal.
500
Which is an example of an accrual?
A) recording a portion of prepaid rent that has expired
B) recording unrecorded revenues
C) recording supplies consumed
D) recording depreciation
B
500
What is an example of a reversing entry?
Debit to interest payable; credit to interest expense
Debit to wages payable; credit to wages expense
Can only reverse accruals.
500
How are notes payable due in 90 days classified on the balance sheet?
As a current liability
500
Where does frieght-out belong on the income statement?