ACCOUNTING I Fall Final Exam Study Guide. 1. Classify the following as: A sset, Liability, Owner’s E quity, Revenue or Expense and give the Normal Balance . Cash Accounts Receivable Accounts Payable
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a. Increased by a debit
b. Decreased by a credit
c. Increased by a credit
d. Decreased by a debit
a. AR is decreased and cash is increased.
b. Sales is increased and cash is increased.
c. AR is increased and cash is increased.
d. Sales is decreased and cash is increased.
a. debit Capital, credit cash
b. debit Cash, Credit Accounts Payable
c. debit Cash; credit Capital
d. debit Cash; credit Drawing
a. a decrease in an asset.
b. an increase in a liability.
c. an increase in an asset.
d. a decrease in an expense
a. debit, debit and credit.
b. debit, credit and debit.
c. credit, debit and debit.
d. debit, credit and credit.
a. matching revenue to expense
b. double-entry accounting
c. closing the books
d. objective evidence
a. when you replenish the Petty Cash Account
b. when you establish the Petty Cash Account
11. What is the ending balance on the bank reconciliation using a $10 bank fee, $250.00 in outstanding checks and $500.00 outstanding deposit
Checkbook Balance $5,010
Bank Balance $4,750
a. Income Statement Debit and Balance Sheet Credit sides
b. Income Statement Credit and Balance Sheet Debit sides
a. Credit Insurance Expense; Debit Prepaid Insurance
b. Debit Insurance Expense; Credit Cash
c. Debit Insurance Expense; Credit Prepaid Insurance
d. Debit Cash; credit Prepaid Insurance
a. Debit Sales; credit Cash
b. Debit Income Summary; credit Sales
c. debit Sales; credit Income Summary
d. Debit Cash; credit Sales
a. Income Statement Cr. column.
b. Adjusted Trial Balance Dr. column.
c. Balance Sheet Cr. column.
d. Adjustments Dr. column.
a. Cash and Capital.
b. Revenue and expense accounts and the owner’s drawing account.
c. contra accounts.
d. open accounts.
17. Only the person a check is made out to can own the check.
18. If the person a check is made out to simply signs their name on the back of the check that is called a blank endorsement.
19. A blank endorsement transfers ownership to whoever is in possession of the check
A Balance Sheet reports a business’s financial condition on a single date.
21. When the owner withdraws cash the owner’s drawing account should be posted with a credit.
22. The formula for calculating Net Income component percentage is Net Income/Net Sales.
23. Proving cash means comparing the cash balance in the general ledger to the cash balance in your check book.
24.Permanent accounts accumulate balances while temporary accounts are zeroed out at the end of the fiscal period.
25. If Sales are greater than expenses you have Net Income therefore for Net Income on the Income Statement credits to sales would be greater than debits to expenses.
26.Closing entries are made at the end of the accounting period to transfer balances of temporary accounts to the owner’s capital account, closing Sales, Expense, Net Income and Drawing).
27. A worksheet is used to plan adjustments and sort financial information after publishing financial statements
28.A balance sheet reports a business’s financial progress over a period of time.
29.Temporary accounts will begin each fiscal period with a zero balance.
30.A journal entry or transaction is a business activity with a debit and credit that will change assets, liabilities or owner’s equity.
32. In the Accounting Equation Assets=Liabilities + Owner’s Equity, Owner’s Equity can not be negative.
33. A chart of accounts is a list of accounts used by a business and only lists the account name and number.
35. Transactions are recorded in chronological order in a journal and the accounting system will post each entry immediately to the individual ledger and every ledger will keep a running balance of each account.
36. Double lines rules across a journal or worksheet indicate the amounts have been verified as correct
37. An cash payment entry was posted in error to Rent Expense instead of Repair Expense. The correction would be to Debit Repair Expense and credit Rent Expense
38. Assets are listed on the Balance sheet in Alphabetical order and Expenses are listed on the Income Statement in Chronological Order.
39. A check with a future date is called a post-dated check, if it is submitted before the date on the check the bank may refuse to pay and it would be considered a dishonored check.
40.Closing entries make all revenue, expense and drawing accounts zero
41.A business owned by one person is called a proprietorship.
42.The Father of Accounting is known to be Mario Luigi