Unit 1
The standards, conventions, and rules that accountants follow to prepare financial reports are known as:
What is General Accepted Accounting Principles (GAAP)
The Furniture Company prepares its financial statements four times per year. Which assumption is the Furniture Company following?
What is time period?
Aquisha's Bookkeeping paid cash for the telephone bill, $134. What is the journal entry to record this transaction?
Debit Utilities Expense, $134; credit Cash, $134.
The transaction RECEIVED A CHECK FOR LEGAL FEES would result in the journal entry:
What is debit Cash and credit Legal Fees-Revenue?
On October 31, Cherokee Company received a bank statement showing the following information:
Bank statement balance $4,375.00
Bank service charge $25.00
The records of the business show the following information:
Outstanding deposit, Oct. 29 $500.00 Outstanding checks:
Outstanding deposit, Oct. 30 $175.00 No. 329 $325.00
No. 330 $125.00
No. 331 $75.00
Assuming that the bank statement balance is correct, what is the correct Cash account balance on October 31?
What is $4,525.00?
Master Marketing signed a $40,000.00, 90-day note at 6% on June 1, 20XX. Master Marketing uses a 360-day year. What is the total amount of interest to be paid on this note?
What is $600
What is the common term for a retirement savings plan sponsored by employers that will allow workers to save and invest from their paychecks before taxes?
What is 4.01K Savings plan
Maria is careful to avoid discussing her accounting clients’ information with other people. This is an example of which key principle for ethics in accounting?
What is confidentiality?
Fred's Furniture Store paid cash for advertising, $375. What is the journal entry to record this transaction?
Debit Advertising Expense, $375; credit Cash, $375
Pesky Termite received $85 cash from Bad Wood Hotel for payment on account. The journal entry for Pesky Termite to record this transaction is:
What is Debit Cash, $85, credit Accounts Receivable/Bad Wood Hotel, $85?
Mayberry Ice Cream Shoppe has $1,500.00 in wages, $93.00 in Social Security withholding, $21.75 in Medicare withholding, $200.00 in federal income tax withholding, and $80.00 in state income tax withholding. The federal unemployment tax rate is 0.8%. In this scenario, what is the Social Security Tax Payable for the pay period?
What is $186?
Mary Ann's Sewing Notions received a check for $75.00 from Cathy Martin, whose account was previously written off. Mary Ann's Sewing Notions uses the Allowance Method for uncollectible accounts. What is the correct entry to re-open the account for Cathy Martin?
Debit Accounts Receivable/Cathy Martin, $75.00; credit Allowance for Uncollectible Accounts, $75.00
What is the term for a financial reporting period of time beginning on January 1 and ending on December 31?
What is Calendar Year
Jason demonstrates accuracy and truthfulness when he works with his accounting clients. This is an example of which key principle for ethics in accounting?
What is integrity?
Food Supply received $320 cash from Pancake Hut for payment on account. What is the journal entry for Food Supply to record this transaction?
Debit Accounts Cash, $320; credit Accounts Receivable/Pancake Hut, $320.
Cara's CDs paid cash on account to Willie's Wholesale, $595, covering Purchase Invoice No. 60. The journal entry for Car's CDs to record this transaction is:
What is debit Accounts Payable/Willie's Wholesale, $595; credit Cash $595
On July 31 of the current year, Beaufort Brothers received a bank statement dated July 30. The following information is obtained from the bank statement and from the records of the business:
Bank statement balance $1,350.00
Outstanding checks:
No. 250 $95.00
No. 251 $175.00
Outstanding deposits:
July 30 $250.00
Bank service charge $5.00
Checkbook balance on Check Stub No. 252 $1,335.00
Does the bank statement reconcile?
Yes, the adjusted checkbook balance and the adjusted bank balance agree.
Grandfather Tours signed a $12,000, 180-day note at 9% on March 1, 20XX. Grandfather Tours uses a 360-day year. What is the total amount of interest to be paid on this note?
What is $540?
Which career involves providing financial advice to help individuals and business organizations, and requires education and experience as well as passing a uniform exam?
What is a certified public accountant (CPA)
Joe Blake is the president and primary stockholder of Blake Enterprises. He keeps his personal income and his business income in the same checking account. Which assumption is he violating?
What is business entity?
Marvin's Motorcycles received $125 cash from Stewart's Rides for payment on his account. Stewart's Rides took a $25 sales discount for paying early. What is the journal entry for Marvin's Motorcycles to record this transaction?
Debit Cash, $125; debit Sales Discounts $25; credit Accounts Receivable/Stewart's Rides, $150.
James is closing the income summary account. His company had a net income of $900. The correct journal entry is to debit:
Income Summary, and credit Owner's Equity, $900.
Matt has gross earnings of $300 and total deductions of $126.75. His net pay is:
What is $173.25?
High Country Apparel signed a $75,000, two-year, interest-bearing, 5% note on October 1, 20XX. The maturity value of the note is:
$82,500
In which business ownership structure are business debts the total responsibility of a business so that personal property of the owner is protected from loss?
What is a corporation?
Harley's Hog BBQ owns and operates several barbecue restaurants. In 20XX, Harley, the owner, took out a loan for his business in the amount of $100,000. The loan will be completely paid off within 6 months. When preparing the financial statements of the business, Harley opted not to list the loan because it was so close to maturity. Which principle did Harley's Hog BBQ violate?
What is full disclosure principle?
Lucy's Famous Mexican Food sold merchandise for $26, plus sales tax of $1, to Craig Morton, who paid for the merchandise with a bank debit card at the time of the sale. What is the journal entry for Lucy's Famous Mexican Food to record this transaction?
Debit Cash, $27; Credit Sales, $26, Sales Tax Payable, $1.
Mary is preparing the closing entries for her company. After she has closed the Income Summary account, what will she do NEXT?
Journalize an entry to close the owner's drawing account
On December 23, Wake Incorporated received notice from the bank of a dishonored check from Davie Company in the amount of $125. The bank charged a service fee of $25. The correct journal entry for Wake Incorporated to record the dishonored check is:
debit Accounts Receivable/Davie Company $150; Credit Cash $150.
Sports Warehouse received a payment in the amount of $697.50 for a note receivable. Interest on the note receivable was $47.50. The journal entry to record the receipt of payment of the note receivable is:
Debit Cash, $697.50; credit Interest Income, $47.50, Notes Receivable, $650.00.
In an Excel spreadsheet, what is the correct formula to multiply the value in B6 by the value in C12?
What is =B6*C12?
Amy is just forming her private accounting practice. She would like to join a professional organization that will help her network with other CPAs and provide guidance on developing her firm. Which organization would Amy want to join?
What is AICPA?
Carl's CDs purchased store supplies on account from Mason Supply for $425. What is the journal entry for Carl's CDs to record this transaction?
Debit Supplies, $425; Credit Accounts Payable/Mason Supply, $425.
The Sales account has a balance of $3,875. To close the Sales account, debit:
Sales $3,875 and credit Income Summary $3,875.
Carson’s Candy Shoppe has $2,000 in gross pay, $124 in Social Security withholding, $29 in Medicare withholding, $500 in federal income tax withholding, and $100 in state income tax withholding. The federal unemployment tax rate is 0.8%. What is the employer's federal unemployment tax for the pay period?
What is $16?
Master Marketing received a payment on a note receivable in the amount of $1,295. Interest on the note receivable was $95. The journal entry to record the payment of the note receivable is:
debit cash $1,295; credit Interest Income, $95, Notes Receivable, $1,200.00
Data can be entered into a cell as a numeric label (used to identify or name information) by first entering which character?
What is an apostrophe (')?
Brian is an accountant in a local firm. He submits an accounting report to his manager that suggests an action that will ultimately benefit him monetarily. Which key principle for ethics in accounting has Brian violated?
What is independence?
Jacob Doe Tractor purchased store supplies on account from Tractor Supply for $942. What is the journal entry for Jacob Doe Tractor to record this transaction?
Debit Supplies, $942; Credit Accounts Payable/Tractor Supply, $942.
Icy Treats purchased merchandise for cash from Flavor Supply for $100. The journal entry for Icy Treats to record this transaction is:
Debit Purchase, $100; credit Cash, $100
On March 31, Iredell Company received a bank statement showing the following information.
Bank statement balance $2,345.00 Bank service charge $15.00 The records of the business show the following information:
Outstanding deposit, Mar. 29 $250.00 Outstanding checks:
No. 288 $225.00
No. 289 $25.00
Assuming that the bank statement balance is correct, what is the correct Cash account balance on March 31?
What is $2,345?
Mother Goose Children's Clothing received a check for $125.00 from Little Angels, whose account was previously written off. Mother Goose Children's Clothing uses the Allowance Method for uncollectible accounts. What is the correct entry to re-open the account for Little Angels?
Debit Accounts Receivable/Little Angels, $125.00; credit Allowance for Uncollectible Accounts, $125.00
The accounting assumption that a business is expected to survive and operate indefinitely is called a:
What is going concern?
Lisa is applying for a position in a small insurance agency. The company wants to hire an individual that can convert its manual accounting system to a computerized system. She listed on her application that she has an accounting degree as well as an emphasis in computerized systems. These qualifications represent which type of skills?
What is workplace skills?
Dipper's Ice Cream Parlor returned merchandise that was purchased on account to The Ice Cream Company, $600. What is the journal entry for Dipper's Ice Cream Parlor to record this transaction?
Debit Accounts Payable/The Ice Cream Company, $600; Credit Purchases Returns and Allowances, $600.
Susan discovered that a sale on account to Michelle Company on February 12 for $800 was incorrectly charged to the account of Michael Company. What is the journal entry to correct this error?
Debit Michelle Company $800 and credit Michael Company $800
Burger Barn paid the following taxes: Social Security $240.00, Medicare $110.00, Federal Income Tax $250.00. What is the entry to journalize the payment of the payroll taxes?
Debit Social Security Tax Payable $240.00, Medicare Tax Payable $110.00, Federal Income Tax Payable $250.00; credit Cash $600.00
Sneakers Snack Shop signed a $80,000, 60-day, 7%, interest-bearing note on July 1. What is the maturity date of the note?
August 30