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WorksheetsCorporation Questions (Chapters 9-15)
Total questions: 142
Worksheet time: 1hrs 11mins
Name
Class
Date
1.
An organization with the legal rights of a person and which may be owned by many persons.
a)
Corporation
b)
Sole Proprietorship
c)
Partnership
d)
None of these
2.
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances.
a)
debit memorandum
b)
purchase invoice
c)
purchase discount
d)
special journal
3.
Total shares of ownership in a corporation.
a)
capital stock
b)
corporation
c)
share of stock
d)
none of these
4.
Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payable.
a)
purchases returns
b)
purchases discount
c)
cash discount
d)
debit memorandum
5.
A deduction that a vendor allows on the invoice amount to encourage prompt payment.
a)
cash discount
b)
purchases discount
c)
purchase invoice
d)
none of these
6.
A cash discount on purchases taken by a customer.
a)
purchases discount
b)
cash discount
c)
inventory discount
d)
debit discount
7.
A journal used to record only one kind of transaction.
a)
special journal
b)
general journal
c)
spending journal
d)
none of these
8.
Each unit of ownership in a corporation.
a)
share of stock
b)
cash discount
c)
shareholder
d)
capital stock unit
9.
A merchandising business that sells to those who use or consume the goods.
a)
retail merchandising business
b)
wholesale merchandising business
c)
record retail business
d)
inventory merchandising wholesaler
10.
An invoice used as a source document for recording a purchase on account transaction.
a)
purchase invoice
b)
purchase return
c)
purchase discount
d)
purchase order
11.
If the actual petty cash on hand is $43.00 but the records show that $45.00 should be on hand, the petty cash fund is said to be over.
a)
True
b)
False
12.
Purchases Returns and Allowances is a contra account to Cost of Merchandise.
a)
True
b)
False
13.
When purchases are recorded at their cost, including any related shipping costs & taxes, the Historical Cost account concept is being applied.
a)
True
b)
False
14.
The term of sale 1/10, n/30 means that the customer may deduct 1% of the invoice amount if payment is made within 30 days of the invoice date.
a)
True
b)
False
15.
The purchases account is increased by a credit and decreased by a debit.
a)
True
b)
False
16.
When several journals are used, an abbreviation is used in the Post.Ref. column of a ledger to show the journal from which the posting is made.
a)
True
b)
False
17.
Trade discounts normally are recorded in the purchases discount account.
a)
True
b)
False
18.
Purchases Discount is increased by a credit entry.
a)
True
b)
False
19.
Purchases returns and allowances
a)
increase the amount of purchases.
b)
decrease the amount of purchases.
c)
do not affect the amount of purchases.
d)
affect the cash flow.
20.
Merchandise with a list price of $1500 is purchased on account for $900 on August 1. Terms of sale are 2/10, n/30. Payment is made on August 17 The amount paid should be
a)
$1500
b)
$900
c)
$600
d)
$882
21.
The purchases account is classified as
a)
an expense account
b)
as asset account
c)
a liability account
d)
a cost account
22.
The source document for a cash purchases is
a)
a memorandum
b)
an invoice
c)
a receipt
d)
a check
23.
Supplies bought for use in a business are recorded in the
a)
supplies expense account
b)
purchases account
c)
supplies account
d)
cash account
24.
If merchandise is purchased for $1000 on August 1, with terms of sale of 2/10, n/30, the amount due to the vendor on August 9 is
a)
$1000
b)
$990
c)
$980
d)
$20
25.
Since contra accounts are offsets to their related accounts, contra account normal balances are
a)
debits
b)
credits
c)
opposite the normal balances of their related accounts
d)
the same as the normal balances of their related accounts
26.
A cash discount on sales taken by a customer.
a)
sales discount
b)
sales journal
c)
sales allowance
d)
sales credit
27.
Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor's accounts receivable.
a)
sales allowance
b)
sales discount
c)
cash discount
d)
credit card sale
28.
A sale in which a credit card is used for the total amount of the sale at the time of the transaction.
a)
credit card sale
b)
credit memorandum
c)
sales allowance
d)
point-of-sale terminal
29.
A computer used to collect, store, and report all the information of a sales transaction.
a)
point-of-sale terminal
b)
sales journal
c)
batching out
d)
batch report
30.
A special journal used to record only cash receipt transactions.
a)
cash receipts journal
b)
sales journal
c)
general journal
d)
cash sales journal
31.
A form prepared by the vendor showing the amount deducted for returns and allowances.
a)
credit memorandum
b)
sales allowance
c)
sales journal
d)
sales invoice
32.
The report that summarizes the cash and credit card sales of a point-of-sale terminal.
a)
terminal summary
b)
batch report
c)
sales memorandum
d)
sales journal
33.
A special journal used to record only sales of merchandise on account.
a)
sales journal
b)
purchases journal
c)
cash receipts journal
d)
general journal
34.
The process of preparing a batch report of credit card sales from a point-of-sales terminal.
a)
batching out
b)
batch reporting
c)
sales discounting
d)
terminal summary
35.
Purchases and sales of merchandise are the two major activities of a merchandising business.
a)
True
b)
False
36.
The amount of sales tax collected is an asset of the business until paid to the state government.
a)
True
b)
False
37.
Cash is proved when the total of the Cash Debit Column of a cash receipts journal equals the next unused check stub.
a)
True
b)
False
38.
When a customer is granted credit for merchandise returned, Accounts Receivable is debited.
a)
True
b)
False
39.
When cash is received for a sale on account within the discount period, the amount of credit to Accounts Receivable is reduced by the amount of discount.
a)
True
b)
False
40.
A terminal summary reports total cash and credit card sales of a point-of-sale terminal.
a)
True
b)
False
41.
Regardless of when merchandise is sold, revenue should be recorded when cash is received.
a)
True
b)
False
42.
Because Sales Discount is a contra account to Sales, it has a normal credit balance.
a)
True
b)
False
43.
Point-of-sale terminals use UPC symbols to obtain the description and price of merchandise sold.
a)
True
b)
False
44.
Sales invoices should be
a)
numbered in sequence.
b)
prepared in triplicate.
c)
used as source documents for sales on account.
d)
all of these.
45.
When merchandise is sold on account and sales tax is also collected,
a)
Accounts Receivable is credited for the total sale and sales tax.
b)
the accounts receivable account balance is increased.
c)
Sales is debited for the price of the goods.
d)
the sales tax is not reported.
46.
Sales discounts are recorded in a
a)
sales journal
b)
cash receipts journal
c)
general journal
d)
batch report
47.
Sales Returns and Allowances is
a)
an expense account.
b)
a revenue account.
c)
a contra expense account.
d)
a contra revenue account.
48.
The amount of sales tax on a sale is calculated as the price of goods
a)
plus the sales tax rate
b)
times the sales tax rate
c)
minus the sales tax rate
d)
divided by the sales tax rate
49.
Sales for cash and credit cards are recorded as a single cash sales transaction.
a)
True
b)
False
50.
A check mark is placed in parentheses below the General Debit and General Credit column totals in the cash payments journal to indicate that the two column totals are
a)
posted individually
b)
posted only as part of the column total
c)
not posted
d)
none of these
51.
The accounts receivable ledger contains only accounts of
a)
vendors
b)
cash customers
c)
charge customers
d)
none of these
52.
Daily general ledger account balances are
a)
usually not necessary
b)
necessary to do monthly financial statements
c)
posted to the accounts receivable ledger daily
d)
needed if the dollar amounts are large
53.
When a credit is posted to the accounts payable ledger,
a)
the previous balance is added to the new amount posted in the Credit column
b)
the source document number and page number of the journal are written in the Post. Ref column of the account
c)
the credit amount is written in the Debit column of the account
d)
balance is written in the item column
54.
A general ledger sorts and summarizes all information affecting
a)
income statement & balance sheet accounts
b)
accounts receivable accounts
c)
accounts payable accounts
d)
none of these
55.
The separate amounts in the Accounts Receivalbe Debit column of a sales journal are
a)
posted individually to the general ledger
b)
posted to the general ledger only as apart of the column total
c)
not posted to the general ledger
d)
none of these
56.
An error in posting may cause
a)
income to be overstated or understated on the income statement
b)
a business to pay too much to a vendor
c)
cash on hand to be less than the balance in the cash account
d)
all of these
57.
When opening a new page in an accounts receivable ledger,
a)
balance is written in the Item column
b)
the Item column is left blank
c)
a number is written in the Post. Ref column
d)
none of these
58.
A schedule of accounts payable is prepared
a)
before all journal entries are posted
b)
in the middle of the month
c)
after all journal entries are posted
d)
frequently
59.
Journal entries are sorted and summarized by transferring information to
a)
accounts payable ledger accounts
b)
accounts receivable ledger accounts
c)
ledger accounts
d)
all of these
60.
An account in a general ledger that summarizes all accounts in a subsidiary ledger is
a)
an expense account
b)
a controlling account
c)
a capital account
d)
none of these
61.
A check mark in parentheses below the General Debit column of a journal indicates that the total
a)
has been posted
b)
will be posted later
c)
is not posted
d)
none of these
62.
When a debit is posted to the accounts payable ledger,
a)
the debit amount is written in the Debit column of the account
b)
the cash account increases
c)
the controlling account is increased by the entry
d)
all of these
63.
The Accounts Receivable Debit column total of a sales journal is
a)
posted monthly to a customer account
b)
posted to the general ledger controlling account at the end of each month
c)
not posted
d)
posted often
64.
A listing of vendor accounts, account balances, and total amount due to all vendors is a
a)
schedule of accounts receivable
b)
schedule of accounts payable
c)
trial balance
d)
cash proof
65.
The total of the schedule of accounts receivable should equal
a)
the accounts receivable account balance in the general eldger
b)
the cash account
c)
the debit and credit proof
d)
none of these
66.
The money paid for employee services.
a)
salary
b)
employee earning record
c)
net pay
d)
total earnings
67.
The period covered by a salary payment.
a)
pay period
b)
tax base
c)
total eanings
d)
salary
68.
The total amount earned by all employees for a pay period.
a)
payroll
b)
net pay
c)
total earnings
d)
payroll taxes
69.
The total due for a pay period before deductions.
a)
total earnings
b)
net pay
c)
pay period
d)
payroll
70.
Taxes based on the payroll of a business.
a)
payroll taxes
b)
tax base
c)
total withholdings
d)
withholding allowance
71.
a federal tax paid for old-age, survivors, and disability insurance.
a)
social security tax
b)
medicare tax
c)
estate tax
d)
income tax
72.
A federal tax paid for hospital insurance.
a)
medicare tax
b)
social security tax
c)
income tax
d)
estate tax
73.
The maximum amount of earnings on which a tax is calculated.
a)
tax base
b)
total earnings
c)
withholding allowance
d)
none of these
74.
A business form used to record payroll information
a)
payroll register
b)
employee earnings record
c)
net pay
d)
payroll taxes
75.
The total earnings paid to an employee after payroll taxes and other deductions.
a)
net pay
b)
salary
c)
total earnings
d)
none of these
76.
A business form used to record details affecting payments made to an employee.
a)
employee earnings record
b)
payroll register
c)
total earnings
d)
pay period
77.
Businesses use payroll record to inform employees of their annual earnings and to prepare payroll reports for the government.
a)
True
b)
False
78.
A deduction from total earnings for each person legally supported by a taxpayer, including the employee.
a)
withholding allowance
b)
net pay
c)
payroll register
d)
medicar
79.
All deductions from employee wages are recorded in a payroll register.
a)
True
b)
False
80.
The first task in preparing a payroll is to determine the number of days worked by each employeee.
a)
True
b)
False
81.
Total earnings are sometimes referred to as net pay or net earnings.
a)
True
b)
False
82.
Payroll taxes withheld represent a liability for an employer until payment is made.
a)
True
b)
False
83.
When an employee's earnings exceed the tax base, no more social security tax is deducted.
a)
True
b)
False
84.
The amount of income tax withheld from each employee's total earnings is determined from the number of withholding allowances and by the employee's marital status.
a)
True
b)
False
85.
Employee total earnings are calculated as (regular hours x regular rate ) + (overtime hours x overtime rate)
a)
True
b)
False
86.
A business is required by law to withhold certain payroll taxes from employee salaries.
a)
True
b)
False
87.
A single person will have less income tax withheld than a married person.
a)
True
b)
False
88.
Social Security tax is paid by the employer only.
a)
True
b)
False
89.
The information used to prepare payroll checks is taken from a payroll register.
a)
True
b)
False
90.
Employee regular earnings are calculated as
a)
regular hours times regular rate
b)
total hours divided by regular rate
c)
total hours plus overtime rate
d)
overtime hours minus overtime rate
91.
Federal income tax is withheld from employee earnings
a)
only in those states electing to do so.
b)
in all states with over 10,000,000 population.
c)
only in states where a state income tax is levied.
d)
in all 50 states.
92.
Each employee name is listed in a payroll register along with
a)
employee number
b)
marital status
c)
withholding allowances
d)
all of these
93.
The total earnings paid to an employee after payroll taxes and other deductions is recorded in the payroll register's
a)
Gross Pay column
b)
Total Earnings column
c)
Net Pay column
d)
Total Deductions column
94.
Individual payroll checks are usually written on
a)
a company's regular checking account
b)
a special payroll checking account
c)
a special purposes account
d)
an employee earnings account
95.
A business form used to record details affecting payments made to an employee is
a)
an employee earnings record
b)
a payroll journal
c)
an employee accounts payable record
d)
a tax withholding form
96.
The Accumulated Earnings column of the employee earnings record
a)
shows net pay for the year
b)
is the total earnings since the first of the year.
c)
shows net pay for one quarter
d)
is the gross earnings for one quarter
97.
The amount on the employee earnings record used to determine if certain payroll taxes apply to an employee's earnings is
a)
net pay
b)
accumulated earnings
c)
gross earnings
d)
social security taxes
98.
All employees must reportt heir withholding allowances on a
a)
payroll register
b)
memorandum
c)
Form W-4
d)
Form W-2
99.
The social security tax is calculated by
a)
multiplying total earnings by the tax rate.
b)
multiplying net earnings by the tax rate.
c)
using a tax table
d)
none of these
100.
Some businesses deposit employee net pay directly to each employee bank account using
a)
payroll checks
b)
payroll registers
c)
EFT
d)
none of these
101.
Until the amounts withheld from employee salaries are paid by the employer, they are recorded as
a)
assets
b)
liabilities
c)
salary expense
d)
revenue
102.
The entry to journalize paying a semimonthly payroll less deductions for employee income tax, social security and Medicare tax, and US Savings Bonds is a credit to Cash and the liability accounts and a debit to
a)
Salary Expense
b)
Unemployment tax payable-federal
c)
payroll taxes expense
d)
cash
103.
The total earnings subject to federal unemployment tax is referred to as
a)
unemployment taxable earnings
b)
taxable earnings
c)
gross earnings
d)
total earnings
104.
Each employer must file a federal tax return showing the federal income tax and social security and Medicare taxes due the government
a)
monthly
b)
quarterly
c)
yearly
d)
semiannually
105.
Employers are required to furnish each employee with an annual statement of earnings and withholdings before
a)
December 31 of the current year
b)
January 1 of the following year
c)
January 15 of the following year
d)
January 31 of the following year
106.
The source document for paying employee income tax and social security and Medicare tax is
a)
a check
b)
a receipt
c)
a memorandum
d)
none of these
107.
In general, employers are required to pay state unemployment taxes
a)
monthly
b)
during the month following each calendar quarter
c)
annually
d)
none of these
108.
The source document for paying state unemployment tax is
a)
a check
b)
a receipt
c)
a memorandum
d)
none of these
109.
A state tax used to pay benefits to unemployed workers is
a)
Social Security tax
b)
Medicare tax
c)
Unemployment tax
d)
State Unemployment tax
110.
The amount recorded in Income Summary is extended to the Balance Sheet Debit or Credit column.
a)
True
b)
False
111.
The difference between an asset's account balance and its related contra account is called book value.
a)
True
b)
False
112.
The prepaid insurance account must be adjusted at the end of a fiscal period because the account balance does not reflect the value of the insurance that expired during the period.
a)
True
b)
False
113.
The adjustment for federal income tax includes
a)
an expense and a liability account.
b)
an expense account only.
c)
an expense account and a temporary equity account.
d)
a liability account only.
114.
Depreciation expense is calculated using all of the following amounts except
a)
fair market value.
b)
estimated salvage value.
c)
estimated useful life.
d)
original cost.
115.
The entry to journalize the adjustment for merchandise inventory when beginning Merchandise Inventory is $125,000 and ending Merchandise Inventory is $115,000 is
a)
debit Merchandise Inventory, $10,000; credit Income Summary $10,000
b)
debit Income Summary, $10,000; credit Merchandise Inventory, $10,000
c)
debit Merchandise Inventory $115,000; credit Income Summary $115,000
d)
debit Income Summary $115,000; credit Merchandise Inventory $115,000
116.
Preparing a work sheet at the end of each fiscal period is an application of the accounting concept
a)
Accounting Period Cycle.
b)
Adequate Disclosure.
c)
Matching Expenses with Revenue.
d)
Historical Cost.
117.
When a work sheet is completed, a net loss will appear in the
a)
Income Statement Debit and Balance Sheet Credit columns.
b)
Income Statement Credit and Balance Sheet Debit columns.
c)
Income Statement Debit and Income Statement Credit columns.
d)
Balance Sheet Debit and Balance Sheet Credit columns.
118.
The total amount of depreciation expense that has been recorded since the purchase of a plant asset is called
a)
book value.
b)
accumulated depreciation.
c)
salvage value.
d)
net realizable value.
119.
Recording expenses in the fiscal period in which the expenses contribute to earning revenue is an application of the accounting concept
a)
Accounting Period Cycle.
b)
Adequate Disclosure.
c)
Matching Expenses with Revenue..
d)
Historical Cost.
120.
The book value of accounts receivable
a)
is equal to the balance in the Accounts Receivable controlling account.
b)
reflects the amount the business expects to collect in the future.
c)
is calculated as Accounts Receivable less Uncollectible Accounts Expense.
d)
can be obtained from a single general ledger account.
121.
A work sheet is
a)
used to plan adjustments and sort financial statement info
b)
prepared only once a year.
c)
prepared to aid in the analysis of financial statements.
d)
not necessary for small businesses.
122.
Preparing financial statements that provide information about a business's financial condition, changes in this financial condition, and the progress of operations is an application of the accounting concept ____.
a)
Consistent Reporting
b)
Adequate Disclosure
c)
Historical Cost
d)
Matching Expenses with Revenue
123.
Reporting financial information the same way from one fiscal period to the next is an application of the accounting concept ____.
a)
Consistent Reporting
b)
Adequate Disclosure
c)
Historical Cost
d)
Matching Expenses with Revenue
124.
An income statement has three main sections for ____.
a)
assets, liabilities, and owner's equity
b)
revenue, expenses, and inventory
c)
revenue, cost of merchandise sold, and expenses
d)
owner's equity, share of net income, and drawing
125.
The total original price of all merchandise sold during a fiscal period is ____.
a)
the cost of merchandise sold
b)
the cost of goods sold
c)
the cost of sales
d)
all of the above
126.
Recording the total original price of all merchandise sold as the cost of merchandise sold is an application of the accounting concept ____.
a)
Consistent Reporting
b)
Adequate Disclosure
c)
Historical Cost
d)
Matching Expenses with Revenue
127.
Cost of merchandise sold is found by taking the amount of beginning merchandise inventory ____.
a)
less purchases plus ending inventory
b)
plus gross profit on sales
c)
less expenses
d)
plus purchases less ending inventory
128.
The revenue remaining after cost of merchandise sold has been deducted is ____.
a)
gross profit on sales
b)
cost of merchandise sold
c)
net sales
d)
total sales
129.
For a merchandising business, every sales dollar reported on the income statement includes ____.
a)
cost of merchandise sold and total expenses only
b)
total expenses and gross profit on sales only
c)
total expenses and net income only
d)
cost of merchandise sold, gross profit on sales, total expenses, and net income before income tax
130.
Acceptable component percentages should be determined ____.
a)
based only on industry standards
b)
based only on comparisons with prior fiscal periods
c)
based on industry standards and
comparisons with prior fiscal periods
d)
based on the amount of each sales dollar that is considered acceptable
131.
Sometimes increasing the markup to improve an unacceptable component percentage for gross profit on sales is a bad decision because ____.
a)
markup does not affect gross profit on sales
b)
markup should be decreased to improve gross profit on sales
c)
an increase in markup may actually cause a decrease in sales revenue
d)
none of the above
132.
One way to increase gross profit on sales is to ____.
a)
decrease expenses
b)
decrease sales revenue
c)
increase sales revenue
d)
increase cost of merchandise sold
133.
A financial statement that summarizes the changes in a corporation's ownership for a fiscal period is ____.
a)
an income statement
b)
a balance sheet
c)
a statement of stockholders' equity
d)
a distribution of net income statement
134.
A financial statement that reports a corporation's assets, liabilities, and stockholders' equity on a specific date is ____.
a)
an income statement
b)
a balance sheet
c)
a statement of stockholders' equity
d)
a distribution of net income statement
135.
To prepare the corporation's balance sheet, use the information from ____.
a)
the Balance Sheet columns of a work
sheet
b)
the owners' equity statement
c)
both A and B
d)
neither A nor B
136.
When information about the account balance of each vendor is needed,
a)
an income statement is prepared
b)
a schedule of accounts payable is prepared
c)
a schedule of accounts receivable is prepared
d)
a distribution of net income statement is prepared
137.
Liabilities owed for more than a year are called ____.
a)
current liabilities
b)
long-term liabilities
c)
short-term liabilities
d)
debts
138.
The relationship between the market value per share and earnings per share of a stock is called the ____.
a)
price-earnings ratio
b)
financial ratio
c)
earnings value
d)
par value
139.
The amount of net income after federal income tax belonging to a single share of stock is called ____.
a)
financial ratio
b)
earnings per share
c)
price-earnings ratio
d)
par value
140.
How is the price-earnings ratio calculated?
a)
Market price per share multiplied by the earnings per share
b)
Market price per share divided by the earnings per share
c)
Market price per share plus the earnings per share
d)
Market price per share minus the earning per share
141.
On an income statement, merchandising businesses report
a)
revenue
b)
cost of merchandise sold
c)
gross profit on sales
d)
all of the above
142.
Total sales less sales discount and sales returns and allowances is called ____.
a)
net profit
b)
net income
c)
net sales
d)
none of the above
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