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Quiz on Accounting Final, created by k.marie.h58 on 09/01/2015.

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Accounting Final

Question 1 of 54

1

A stockholer is an owner of one or more shares of a corporation

Select one of the following:

  • True
  • False

Explanation

Question 2 of 54

1

Retained earnings are earnings distributed to stockholders

Select one of the following:

  • True
  • False

Explanation

Question 3 of 54

1

A dividend is an amount earned by a corporation and not yet distributed to stockholders.

Select one of the following:

  • True
  • False

Explanation

Question 4 of 54

1

A group of persons elected by the stockholders to manage a corporation is called a board of directors.

Select one of the following:

  • True
  • False

Explanation

Question 5 of 54

1

A board of directors distributes earnings of a corporation to stockholders by declaring a dividend

Select one of the following:

  • True
  • False

Explanation

Question 6 of 54

1

The purpose of a work sheet is to plan adjustments and summarize their information necessary to prepare financial statments

Select one of the following:

  • True
  • False

Explanation

Question 7 of 54

1

The steps for preparing a work sheet are similar for proprietorships and corporations

Select one of the following:

  • True
  • False

Explanation

Question 8 of 54

1

The Supplies-Office account must be adjusted to show the expense of hat supplies that are used during the year

Select one of the following:

  • True
  • False

Explanation

Question 9 of 54

1

The Prepaid Insurance account is adjusted to show the value of insurance that has been used

Select one of the following:

  • True
  • False

Explanation

Question 10 of 54

1

During a fiscal period, the amount of merchandise on hand increases and decreases

Select one of the following:

  • True
  • False

Explanation

Question 11 of 54

1

Assets that will be used for a number of years in the operation of a business are called current assets

Select one of the following:

  • True
  • False

Explanation

Question 12 of 54

1

Accumulated depreciation is the depreciation expense that has been recorded since the purchase of a plant asset

Select one of the following:

  • True
  • False

Explanation

Question 13 of 54

1

Federal income tax is an expense of a corporation

Select one of the following:

  • True
  • False

Explanation

Question 14 of 54

1

When a corporation makes the quarterly payment of estimated federal income tax, the cash account is credited.

Select one of the following:

  • True
  • False

Explanation

Question 15 of 54

1

Financial statements provide the primary source of information needed by owners and managers to make decisions on the future activity of business.

Select one of the following:

  • True
  • False

Explanation

Question 16 of 54

1

An income statement is used to report a business's financial progress

Select one of the following:

  • True
  • False

Explanation

Question 17 of 54

1

An income statement for a merchandising business has three main sections: revenue section, cost of merchandise sold section, and expenses section

Select one of the following:

  • True
  • False

Explanation

Question 18 of 54

1

Cost of merchandise sold is also known as cost of goods sold

Select one of the following:

  • True
  • False

Explanation

Question 19 of 54

1

Total expenses on an income statement are deducted from the gross profit on sales to find net income before federal income tax

Select one of the following:

  • True
  • False

Explanation

Question 20 of 54

1

When a business's expenses are less than the gross profit on sales, the difference is known as a net loss.

Select one of the following:

  • True
  • False

Explanation

Question 21 of 54

1

Increasing sales revenue while keeping cost of merchandise sold the sale will increase gross profit on sales

Select one of the following:

  • True
  • False

Explanation

Question 22 of 54

1

A statement of stockholders' equity contains two major sections: capital stock and retained earnings

Select one of the following:

  • True
  • False

Explanation

Question 23 of 54

1

Data needed to prepare the liabilities section of a balance sheet are obtained from a work sheet

Select one of the following:

  • True
  • False

Explanation

Question 24 of 54

1

Rules double lines across both amount columns below the Assets section and below the Stockholders' Equity section show that the assets equal liabilities plus owners' equity

Select one of the following:

  • True
  • False

Explanation

Question 25 of 54

1

General ledger account balances are changed only by posting journal entries

Select one of the following:

  • True
  • False

Explanation

Question 26 of 54

1

Temporary accounts are closed at the end of a fiscal period to prepare the general ledger for the next fiscal period

Select one of the following:

  • True
  • False

Explanation

Question 27 of 54

1

The trial balance columns of a work sheet and an income statement contain the information needed to journalize closing entries

Select one of the following:

  • True
  • False

Explanation

Question 28 of 54

1

The ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period.

Select one of the following:

  • True
  • False

Explanation

Question 29 of 54

1

The income summary account is closed into the retained earnings account

Select one of the following:

  • True
  • False

Explanation

Question 30 of 54

1

After all closing entries are posted, the income statement accounts are the only general ledger accounts that have balances

Select one of the following:

  • True
  • False

Explanation

Question 31 of 54

1

The purpose of the post-closing trial balance is to prove the general ledger equality of debits and credits.

Select one of the following:

  • True
  • False

Explanation

Question 32 of 54

1

An income statement has three main sections for

Select one of the following:

  • assets, liabilities and owner's equity

  • revenue, expenses, and inventory

  • revenue, cost of merchandise sold, and expenses

  • owner's equity share of net income, and drawing

Explanation

Question 33 of 54

1

cost of merchandise sold is found by taking the amount of beginning merchandice inventory

Select one of the following:

  • less purchases plus ending inventory

  • plus gross profit on sales

  • less expenses

  • plus purchases less ending inventory

Explanation

Question 34 of 54

1

The revenue remaining after cost of merchandise sold has been deducted is

Select one of the following:

  • gross profit on sales

  • cost of merchandise sold

  • net sales

  • total sales

Explanation

Question 35 of 54

1

one way to increase gross profit on sales is to

Select one of the following:

  • decrease expenses

  • decrease sales revenue

  • increase sales revenue

  • increase cost of merchandise sold

Explanation

Question 36 of 54

1

a financial statement that summarizes the changes in a corporation's ownership for a fiscal period is

Select one of the following:

  • an income statement

  • a balance sheet

  • a statement of stockholder's equity

  • a distribution of net income statement

Explanation

Question 37 of 54

1

a financial statement that reports a corporation's assets, liabilities, and stockholder's equity on a specific date

Select one of the following:

  • an income statment

  • a balance sheet

  • an owner's equity statement

  • a distribution of net income statement

Explanation

Question 38 of 54

1

to prepare the corporation's balance sheet, use the information from

Select one of the following:

  • the balance sheet columns of your worksheet

  • the owner's equity statement

  • both

  • neither

Explanation

Question 39 of 54

1

When information about the account balance of each vendors needed,

Select one of the following:

  • an income statement is prepared

  • a schedule of accounts payable is prepared

  • a schedule of account receivable is prepared

  • a distribution of net income statement is prepared

Explanation

Question 40 of 54

1

Liabilities owed for more than a year are called

Select one of the following:

  • current liabilties

  • long term liabilities

  • short term liabiltiies

  • debs

Explanation

Question 41 of 54

1

On an income statement, merchandising businesses report

Select one of the following:

  • revenue

  • cost of merchandise sold

  • gross profit on sales

  • all of the above

Explanation

Question 42 of 54

1

Total sales less sales discount and sales returns and allowances is called

Select one of the following:

  • net profit

  • net income

  • net sales

  • none of the above

Explanation

Question 43 of 54

1

The two types of journal entries needed to change general ledger account balances at the end of the fiscal period are

Select one of the following:

  • adjusting and correcting entries

  • closing and correcting entries

  • adjusting and closing entries

  • none of the above

Explanation

Question 44 of 54

1

Information needed for journalizing adjusting entries is taken from the

Select one of the following:

  • Trial Balance columns of a work sheet

  • Adjustment columns of a work sheet

  • Income statement columns of a work sheet

  • Balance Sheet columns of a work sheet

Explanation

Question 45 of 54

1

The store supplies inventory adjustment includes a debit to Supplies Expense--Store and a credit to

Select one of the following:

  • Income Summary

  • Merchandise Inventory

  • Purshases

  • Supplies--Store

Explanation

Question 46 of 54

1

The amounts needed for closing entries are obtained from the work sheet's

Select one of the following:

  • Trial Balance and Balance Sheet columns

  • Adjustments and Balance Sheet columns

  • Income Statement and Balance Sheet columns

  • Balance Sheet columns

Explanation

Question 47 of 54

1

To close the revenue account, the revenue account balance for the fiscal period is transferred into

Select one of the following:

  • the income summary account

  • the capital accounts

  • the cash account

  • none of the above

Explanation

Question 48 of 54

1

To close the sales account

Select one of the following:

  • debit Sales; credit cash

  • debit Sales; credit Income Summary

  • debit Income Summary; credit Sales

  • debit Cash; credit Sales

Explanation

Question 49 of 54

1

To close the expense and cost accounts

Select one of the following:

  • debit the expenses and cost accounts; credit Income Summary

  • debit the expense accounts; credit the capital accounts

  • debit Income Summary; credit the expense and cost accounts

  • debit Income Summary; credit the capital accounts

Explanation

Question 50 of 54

1

To close the income summary account when there is net income

Select one of the following:

  • debit Cash; credit Income Summary

  • debit the capital accounts; credit Income Summary

  • debit Income Summary; credit Retained Earnings

  • debit Retained Earnings; credit Income Summary

Explanation

Question 51 of 54

1

Which journal entires change general ledger account balances at the end of a fiscal period

Select one of the following:

  • Adjusting entries

  • Closing entries

  • both

  • neither

Explanation

Question 52 of 54

1

Which balance sheet accounts have up-to-date balances to begin a new fiscal period?

Select one of the following:

  • Asset accounts

  • Liability accounts

  • Capital Accounts

  • All of the above

Explanation

Question 53 of 54

1

Merchandising businesses use an accounting cycle similar to the accounting cycle of

Select one of the following:

  • service businesses

  • proprietorships

  • corporations

  • all of the above

Explanation

Question 54 of 54

1

After adjusting and closing entries have been posted to the general ledger, a

Select one of the following:

  • balance sheet is prepared

  • trial balance is prepared

  • post-closing balance sheet is prepared

  • post-closing trial balance is prepared

Explanation

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