Accounting

A Statement of Owner's Equity for a sole proprietorship is called what for a corporation?

• They are named the same.

• A corporation does not have an equivalent.

• Statement of Retained Earnings.

• Statement of Capital.

Financial accounting focuses on ...

• Recording and summarizing transactions to prepare financial statements for interested users.

• Creating internal controls.

• Developing product costs

• To only serve the decision making needs of internal users.

A ledger account

• Initially records an accounting transaction.

• Lists all of the debits and credits to make sure they are in balance.

• Records the increases and decreases of a specific account (like accounts payable) to calculate its ending balance.

• Is a listing of accounts used by a business with corresponding account numbers.

How many basic financial statements are there?

• 1

• 2

• 3

• 4

• 5

The cost principle requires transactions to be recorded ...

• At the amount actually paid.

• At market value.

• When cash is exchanged.

• At the lower of cost or market.

A book of original entry where transactions are first recorded.

• General Journal

• General Ledger

• Trial Balance

• Subsidiary Ledger

A company purchases $1,200 of merchandise on January 1. On January 5, it returned $200 of merchandise. On January 10, it paid the balance taking a 2% early payment discount. How much was paid for the merchandise?

• $800

• $880

• $900

• $980

Purchase discounts is an expense account that is increased with a credit, the opposite side of increasing a normal expense account. This kind of account is called a(n) ...

• Journal account

• Contra account

• Inventory account

Financial statement are prepared in what order?

• Balance Sheet, Income Statement, Statement of Owner's Equity, Statement of Cash Flows.

• Income Statement, Balance sheet, Statement of Owner's Equity, Statement of Cash Flows.

• Income Statement, Statement of Owner's Equity, Balance Sheet, Statement of Cash Flows.

• Statement of Cash Flows, Balance Sheet, Statement of Owner's Equity, Income Statement.

An account used to record the cost of products sold in a perpetual inventory system is ...

• Cost of Goods Sold

• Purchases

• Merchandise Inventory

• Sales