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WorksheetsCengage Accounting ll Final Exam Study Guide
Total questions: 69
Worksheet time: 51mins
What is the journal entry to record the purchase of merchandise on account?
Purchases
Accounts Payable
Purchases
Sales
Accounts Payable
Purchases
Accounts Receivable
Purchases
Using the straight-line method of depreciation, what is the annual depreciation expense if the original cost of the asset is $820, estimated salvage/disposal value is $100, and the useful life of the asset is 5 years?
$200
$144
$164
$364
How is the book value of Accounts Receivable calculated?
Accounts Receivable - Allowance for Uncollectible Accounts
Net Sales - Accounts Receivable
Accounts Receivable - Net Purchases
Net Sales - Bad Debts or Uncollectible Expense
Which account has a normal credit balance?
Sales Discounts
Purchases Returns and Allowances
Sales Returns and Allowances
Accounts Receivable
When ABC Company makes a cash payment on account, ABC Company's Accounts Payable is debited. Which account is credited?
Merchandise Inventory
Cash
Accounts Receivable
Supplies
What type of business purchases and sells goods?
Service
Merchandising
Consulting
Manufacturing
Elliot's employer pays time-and-a-half for all hours worked over 40 hours per week. Elliot's regular hourly rate is $9.00 per hour. During the week, Elliot worked 49 hours. What are the gross wages/earnings for Elliot this week?
$481.50
$441.00
$360.00
$661.5
What would be the NET PAY for Jacob Perkins?
Earnings-$500;
Federal Inc. Tax-$82;
State Inc. Tax-$10;
Social Security/Medicare (FICA)-$38.25;
Health Insurance-$10;
Retirement-$10; NET PAY equal?
$369.75
$408.00
$349.75
$311.50
Where is the information found to prepare a Trial Balance?
Balance sheet
General ledger
Source document
Income statement
Which financial statement reports assets, liablilities, and stockholder's equity?
Cash Flow Statement
Income Statement
Balance Sheet
Statement of Stockholder's Equity
Where is a controlling account found?
General Ledger
Source Documents
Accounts Payable Subsidiary
Accounts Receivable Subsidiary
What would be the result if the entry to adjust Supplies is NOT made at the end of the fiscal period?
Liabilities would be overstated
Supplies would be understated
Supplies would be overstated
Liabilities would be understated
Which financial statement shows the sales discount account Gross Profit on Sales?
Income statement
Statement of stockholder's equity
Post-closing trial balance
Balance sheet
Which journal entry is used to adjust the Prepaid Insurance account?
Income Summary - Dr
Prepaid Insurance - Cr
Insurance Expense - Dr
Prepaid Insurance - Cr
Prepaid Insurance - Dr
Income Summary - Cr
Insurance Expense - Dr
Income Summary - Cr
Using the percentage of net sales method, what is the adjustment amount for Uncollectible Accounts (Bad Debts Expense) if net sales is $64,000 and the uncollectible rate is 2%
$12,800
$1,280
$62,700
$65,280
Which of the following accounts is debited when journalizing closing entries?
Sales
Sales Returns and Allowances
Purchases
Cash
Which report is prepared after all adjusting and closing entries have been posted?
Post-Closing Trial Balance
Statement of Owner's Equity
Closing Cash Flow Statement
Income Statement
Which accounts appear on the Post-Closing Trial Balance?
Revenue accounts
Temporary accounts
Expense accounts
Permanent accounts
How are employer taxes classified BEFORE payment is made?
Assets
Expenses
Liabilities
Revenues
What type of account is Sales Returns and Allowances?
Expense account
Contra expense account
Revenue account
Contra revenue account
What report shows personal payroll data and yearly cumulative earnings, deductions, and net pay for each employee?
W-4 Form
Employer Earnings (Record)
Time Card
Employee's Accounts Payable
If a customer returns merchandise to the seller, which account will the SELLER debit?
Accounts Payable
Purchases Returns and Allowances
Accounts Receivable
Sales Returns and Allowances
Who pays social security and medicare taxes?
Federal and local governments
Both employer and employees
Employee
Employer
Merchandise is sold on account for $300 plus a 5% sales tax. How much would be debited to Accounts Receivable?
$15.00
$315.00
$300.00
$301.50
What is the result when a transaction is properly analyzed and recorded?
Only two accounts will be used
One or more temporary accounts will be used
Total debits will equal total credits
once account will increase and another will decrease
Which of the following equations is used to compute Cost of Goods Sold?
Gross Sales + Purchase + Ending Inventory
Beginning Inventory + Net Sales - Ending Inventory
Net Sales + Beginning Inventory + Ending Inventory
Beginning Inventory + Purchases - Ending Inventory
What is the journal entry to record the employer's payroll taxes?
Payroll Tax Expense
Federal Income Tax Payable
Payroll Tax Expense
Employees' State Income Tax Payable
Employees' Health Insurance Payable
Payroll Tax Expense
Cash
Payroll Tax Expense
Social Security Tax Payable
Medicare Tax Payable
Federal Unemployment Tax Payable
State Unemployment Tax Payable
What is the balance of temporary accounts at the beginning of each new fiscal period?
Debit
Credit
Negative
Zero
What is the result when total expenses exceeds total revenues?
Retained Earnings
Net income
Capital gain
Net loss
A tax-exempt customer purchased goods for $560 on account. Later a credit memorandum was issued for the return of $160 of goods. What is the balance due?
$160
$560
$720
$400
On May 6, MM Company sold merchandise on account for $9,500 with credit terms of 2/10, n/30. What is the journal entry to record the receipt of payment on May 14?
Cash 9,310
Accounts Receivable 9,310
Cash 9,500
Accounts Receivable 9,500
Cash 9,310
Sales Discount 190
Accounts Receivable 9,500
Cash 8,550
Sales Discount 950
Accounts Receivable 9,500
What is the total cash paid on an $835 invoice dated March 12 with terms of 2/10, n30, paid on March 18?
$16.70
$818.30
$835
$851.70
What is the amount paid to an employee based on a percentage of the employee's sales?
Piece-rate
Bonus
Commission
Overtime pay
What is the correct method to calculate Gross Profit on Sales?
Net Sales + cost of merchandise sold
Net Sales - expenses
Net Sales - cost of merchandise sold
Net Sales + expenses
What is the total employer payroll tax expense?
Taxable Earnings $4,700
FICA Social Security 6.2%
FICA Medicare 1.45%
FUTA Tax 0.8%
SUTA Tax 5.4%
$105.75
$650.95
$291.40
$253.80
What is the term for recording transactions in chronological order?
Journalizing
Analyzing transactions
Posting
Balancing accounts
What document shows a list of all accounts and their account numbers?
Chart of accounts
Income statement
Balance accounts
Source document
Which journal entry is used to record the purchase of merchandise with cash?
Cash Debit
Purchases Credit
Purchases Debit
Cash Credit
Cash Debit
Purchases Returns and Allowances Credit
Purchases Debit
Accounts Payable Credit
What is the term for allocating or equally distributing the cost of a plant asset over the asset's useful life?
Book value
Depreciation
Disposal value
Plant asset
What is Total Assets?
Cash $5,500.00
Petty Cash $100.00
Accounts Payable 2,600.00
Drawing/Withdrawals $800.00
Office Equipment $3,100.00
Accounts Receivable $1,500.00
$12,000
$10,100
$10,200
$11,000
Using the allowance method, what is the journal entry to record Jay Smith's account as being uncollectible?
Accounts Payable/Jay Smith- Debit
Allowance for Uncollectible Accounts- Credit
Allowance for Uncollectible Accounts- Debit
Accounts Payable/Jay Smith- Credit
Accounts Receivable/Jay Smith- Debit
Allowance for Uncollectible Accounts- Credit
Allowance for Uncollectible Accounts- Debit
Accounts Receivable/Jay Smith- Credit
What are the owners of a corporation called?
Board of Directors
Officers
Creditors
Stockholders
Salazar Company returned damaged merchandise purchased from LLS Company. How would Salazar Company record this transaction?
Accounts Payable/LLS Company- Debit
Purchases Return and Allowances- Credit
Purchases- Debit
Accounts Payable/LLS Company- Credit
Purchases Returns and Allowances- Debit
Accounts Payable/LLS Company- Credit
Accounts Payable/ LLS Company- Debit
Purchases- Credit
What report lists each customer, the balance in the customer's account, and the total amount due from all customers?
Statement of Owner's Equity
Income Statement
Schedule of Accounts Receivable
Schedule of Accounts Payable
Trinity earned $1,200 this pay period. What are the deductions withheld for Social Security tax (6.2%) and Medicare tax (1.45%)?
Social Security - $74.40; Medicare - $174.00
Social Security - $74.40; Medicare - $17.40
Social Security - $7.44; Medicare - $17.40
Social Security - $744.00; Medicare - $174.00
How are accounts affected when the owner withdraws cash for personal use?
Assets decrease and drawing/withdrawals decreases
Drawing/withdrawals increases and assets decrease
Liabilities decrease and assets decrease
Liabilities increase and assets decrease
What is the source document for a purchase of merchandise on account?
Receipt
Purchase invoice
Check
Credit memo
ABC Company issued a credit memorandum to customer Ann Fischer for merchandise returned including sales tax. How would ABC Company record this transaction?
Sales Returns and Allowances- Debit
Cash- Credit
Ann Fischer/Accounts Receivable- Debit
Sales Return and Allowance- Credit
Sales Tax Payable- Credit
Sales Return and Allowance- Debit
Sales Tax Payable- Debit
Ann Fischer/Accounts Receivable- Credit
CashDebitSales Tax Payable- Debit
Sales- Credit
What is the term used to describe the steps completed to record financial information for a fiscal period?
Accounting Cycle
Accounting Equation
Financial Method
Financial System
What is the adjusting entry to record annual depreciation expense?
Depreciation Expense- Debit
Equipment- Credit
Depreciation Expense- Debit
Accumulated Depreciation- Credit
Accumulated Depreciation- Debit
Depreciation Expense- Credit
Equipment- Debit
Depreciation Expense- Credit
Which order below shows the correct steps of the accounting cycle?
Collect, verify and analyze source documents
Prepare trial balance
Journalize and post closing entries
Prepare post-closing trial balance
Journalize and post adjusting entries
Prepare financial statements
journalize and post adjusting entries
journalize and post adjusting entries
Prepare financial statements
Journalize and post adjusting entries
Prepare post-closing trial balance
Journalize and post closing entries
Prepare trial balance
Collect, verify and analyze source documents
Collect, verify and analyze source documents
journalize and post business transactions
Prepare trial balance
Journalize and post adjusting entries
Prepare financial statements
Journalize and post closing entries
Prepare post-closing trial balance
What is the take home pay for an employee after deductions are withheld?
Employee pay
Salary Expense
Net pay
Gross pay
How is the accounting equation affected if a business receives $5,000 from revenue/sales?
Decrease assets and decrease revenue
Increase assets and increase revenue
Increase liabilities and decrease stockholder's equity
Increase assets and decrease liabilities
Assuming net sales are $164,000, Cost of Goods Sold is $83,000, and Expenses are $47,000. What is the net income?
$128,000
$128,000
$294,000
$34,000
When a company receives a payment on account, Accounts Receivable decreases. What other account is affected and how?
Account payable increases
Accounts payable decreases
Cash decreases
Cash increases
What accounts are closed at the end of a fiscal period?
Asset
Liability
Temporary
Permanent
What is an organization with the legal rights of a separate entity and which may be owned by many persons?
Partnership
Corporation
Sole proprietorship
Cooperative
What is the source document for recording a cash sale transaction?
Receipt or tape
Memorandum
Sales invoice
Check
All assset account balances are shown on which financial statement?
Income statement
Distribution of net income
Statement of stockholder's equity
Balance sheet
What is a primary advantage of a corporation over other forms of business ownership?
Limited capital
Limited liability
Decisions are made by one person
Ease of organization
Which journal entry REINSTATES Juan Garcia's account, which was PREVIOUSLY written off using the allowance method?
Accounts Payable/Juan Garcia Debit
Allowance for Uncollectible Accounts Credit
Allowance for Uncollectible Accounts Debit
Accounts Payable/Juan Garcia Credit
Accounts Receivable/Juan Garcia Debit
Allowance for Uncollectible Accounts Credit
Allowance for Uncollectible Accounts Debit
Accounts Receivable/Juan Garcia Credit
What is the process of transferring amounts from a journal to a ledger?
Balancing
Journalizing
Reconciling
Posting
What is the term for the total amount of money an employee earns in a pay period?
Payroll
Sales
Net pay
Gross earnings
An asset is purchased on April 1 and has an annual depreciation amount of $3,600. What is the partial-year depreciation expense on December 31? Clue: calculate from April to December; how many months out of 12?
$3,000
$3,240
$2,900
$2,700
When ABC Company records a sale of merchandise on account, Sales and Sales Tax Payable would be credited? Which account should be debited?
Sales
Accounts payable
Cash
Accounts receivable
When an error in journalizing is discovered AFTER POSTING, what should be done?
Write the correction above the error
Journalize a correcting error
Draw a line through the journal entry
Erase the journal entry
Which date range represents a fiscal year?
November 1, 2019 to January 31, 2020
October 1, 2019 to December 31, 2019
August 1, 2019 to July 31, 2020
January 1, 2019 to June 30, 2019
GAAP is used to ensure consistent ethical business practices. What does GAAP stand for?
Generally Accepted Accounting Principles
Guidelines for Applied Accounting Procedures
Global Administration Accounting Procedures
General Accounting Administrative Policies
What is the term for Sales less Sales Discount and Sales Return and Allowances?
Net income
Gross profit
Gross sales
Net sales
