Accounting Final Review

If an error is recorded in a journal entry,

• (A) cancel the error by drawing a neat line through the error

• (B) correct the entry by writing the correct item above the canceled error.

• (C) do not erase the incorrect item.

• (D) all of these.

The first step in the posting procedure is writing the

• (A) entry date in the Date column of the account.

• (B) journal page number in the Post. Ref. column of the journal.

• (C) account number in the Post. Ref. column of the account.

• (D) entry amount in the Debit or Credit column of the account.

Income Summary is a

• (A) asset account

• (B) liability account.

• (C) temporary account.

• (D) permanent account.

Assets taken out of a business for the personal use of the owner are called

• (A) net income

• (B) net loss.

• (C) investments.

• (D) withdrawals.

The entry to establish a $200.00 petty cash fund is

• (A) debit Petty Cash, $200.00; credit Cash, $200.00.

• (B) debit Petty Cash, $200.00; credit Miscellaneous Expense, $200.00.

• (C) debit Miscellaneous Expense, $200.00; credit Cash, $200.00.

• (D) debit Cash, $200.00; credit Petty Cash, $200.00.

If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is

• (A) increased.

• (B) decreased.

• (C) unaffected.

• (D) correct.

On a work sheet, the balance of the owner’s drawing account is extended to the

• (A) Income Statement Debit column

• (B) Income Statement Credit column.

• (C) Balance Sheet Debit column

• (D) Balance Sheet Credit column

Information needed to prepare an income statement’s Revenue section is obtained from a work sheet’s Account Title column and

• (A) Income Statement Debit column

• (B) Income Statement Credit column.

• (C) Balance Sheet Debit column.

• (D) Balance Sheet Credit

When cash is paid for insurance,

• (A) Prepaid Insurance is decreased.

• (B) Prepaid Insurance is credited.

• (C) Prepaid Insurance is increased.

• (D) none of these.

The first digit in the account number 410 means that the account is in the

• (A) Assets division of the general ledger.

• (B) Liabilities division of the general ledger.

• (C) Revenue division of the general ledger.

• (D) Expenses division of the general ledger.