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WorksheetsAccounting 1 - 4.01 & 4.02 Review
Total questions: 114
Worksheet time: 1hrs 23mins
Match the following
A(n) ___ is a book that is summarized in a controlling account in the general ledger.
subsidiary ledger
A cash discount issued by the seller is a(n) ___.
sales discount
An account whose balance decreases another account's balance is a(n) ___.
contra account
A(n) ___ is a credit card issued by a bank and honored by many businesses.
bankcard
A(n) ___ is a form that serves as a record of cash received.
receipt
Match the following
A(n) ___ is a business that sells to the final user.
retailer
A(n) ___ is a transaction that occurs when a business receives full payment for the merchandise sold at the time of the sale.
cash sale
A form that lists the details of a sale and is used as a record of the transaction is a(n) ___.
sales slip
The ___ contains accounts of the charge customers of a business.
accounts receivable subsidiary ledger
The cash received by a business is referred to as a(n) ___.
cash receipt
Match the following
The goods a business buys for resale to customers are known as ___.
merchandise
A(n) ___ is a customer to whom a sale on account is made.
charge customer
Merchandise returned to the seller for full credit is a(n) ___.
sales return
Accounts Receivable is a(n) ___ because its balance must equal the total of the accounts receivable subsidiary ledger.
controlling account
Many states and some cities require that a business add a(n) ___, as a percentage of the selling price of the goods, at the time of the sale.
sales tax
Match the following
The ___ of a sale state the time allowed for payment for sale on account.
credit terms
A(n) ___ is a business that sells to retailers.
wholesaler
A charge customer is entitled to charge merchandise with a(n) ___.
credit card
The items of merchandise a business has in stock are referred to as ___.
inventory
A(n) ___ permits a customer to pay for the merchandise at a later date.
sales on account
Match the following
An example of a(n) ___ is Wal-Mart.
merchandising business
(retailer)
A(n) ___ is a document prepared by the seller granting credit for damaged or returned merchandise.
credit memorandum
(memo)
A price reduction granted by a business for damaged goods kept by the customer is called a(n) ___.
sales allowance
The revenue account for merchandising business is ___.
sales
The amount a customer may deduct if the payment for merchandise is made within a certain time is a(n) ___.
cash discount
True or False: Retailers include clothing stores, CD and tape shops, and automobile dealerships.
True
False
True or False: The account Merchandise Inventory is classified in the chart of accounts as an asset.
True
False
True or False: A sale on account is paid for in cash when the merchandise is sold.
True
False
True or False: A sales slip is usually prepared in multiple copies with the customer receiving the original and the business keeping the remaining copies.
True
False
True or False: Sales taxes are not usually charged to governmental agencies.
True
False
True or False: In a merchandising business, the most frequent type of transaction is the sale of merchandise.
True
False
True or False: Electrical supply companies, auto parts distributors, and food supply companies are examples of wholesalers.
True
False
True or False: Two of the accounts used by merchandising businesses are Merchandise Inventory and Professional Fees.
True
False
True or False: The cash register tape is the source document for the journal entry to record the day's cash sales.
True
False
True or False: A sales discount increases the revenue account Sales.
True
False
True or False: When a cash sale occurs, the details of the sale are printed on two tapes in the cash register simultaneously.
True
False
True or False: A cash discount is recorded at the time the sale is made.
True
False
True or False: Bank card sales are processed the same way as a store's regular charge cared sales.
True
False
True or False: A cash discount is calculated on the total of a sales slip, including the sales tax.
True
False
True or False: The most widely used bank card in North American is American Express.
True
False
True or False: A proof is usually prepared at the end of each day to show that the amount of cash in the cash register equals the amount of cash sales recorded on the cash register tape.
True
False
True or False: A cash discount is an advantage only to the buyer because they are able to purchase the merchandise at a reduced cost.
True
False
The normal balance side of the Merchandise Inventory account is a (a) .
The normal balance side of the Sales Tax Payable account is a (a) .
The normal balance side of the Sales Discount account is a (a) .
The normal balance side of the Sales account is a (a) .
The increase side of the Sales Tax Payable account is a (a) .
The decrease side of the Sales Discounts account is a (a) .
The decrease side of the Sales Tax Payable account is a (a) .
The decrease side of the Sales account is a (a) .
The decrease side of the Merchandise Inventory account is a (a) .
The increase side of the Sales Discounts account is a (a) .
The increase side of the Sales account is a (a) .
The increase side of the Merchandise Inventory account is a (a) .
Sales Returns and Allowances is classified as a
revenue account
owner's equity account
contra revenue account
none of the above
If merchandise is sold for $417.80 and the sales tax rate is 4% (.04), the amount of the sales tax is
$434.51
$16.17
$20.89
none of the above
Sales Tax Payable is classified as a(n)
asset account
liability account
owner's equity account
revenue account
If merchandise is sold for $325.60 and the sales tax rate is 5% (.05), the amount to be collected from a charge customer is
$309.32
$341.88
$325.60
$331.88
If the date of an invoice is May 14, the credit terms are 2/10, n/30, and the invoice was received on May 16, the last date the discount may be taken is
May 26
June 12
May 24
May 14
A purchase order is prepared by the buyer and sent to the supplier as an offer to purchase merchandise or other assets.
true
false
A tickler file contains folders for each day of the month so that invoices can be placed in the folders according to their due dates.
true
false
If the date of the invoice is October 1 and terms are 2/10, n/30, a discount may be taken if the invoice is paid on or before October 31.
true
false
Creditor accounts in the accounts payable subsidiary ledger normally have debit balances.
true
false
A cash discount is an advantage to the buyer but not the seller.
true
false
One example of a good internal control procedure requires that all cash payments be authorized.
true
false
Accounts Payable is a controlling account and it is found in the general ledger.
true
false
A business must write a check to pay the bank for service charges and bank card fees charged to its checking account.
true
false
The annual premium paid for insurance coverage is debited to the asset account, Prepaid Insurance.
true
false
Shipping charges are always paid by the alter.
true
false
If the invoice amount is $1,200 and the credit terms are 3/15, n/45, the amount of the discount is
$36
$180
$360
$3.60
A box of merchandise received by a business would include a(n)
invoice
purchase requisition
purchase order
packing slip
The document prepared by the seller is a(n)
purchase requisition
invoice
purchase order
none of the above
Which of the following statements is true about the Transportation In account?
It is classified as a cost of merchandise account.
Its balance and increase side is a debit.
Its decrease side is a credit.
Its balance shows the cost of delivery charges for merchandise.
All of the above.
A purchase returns and allowances transaction must be posted to the
Purchases and Accounts Payable accounts
Accounts Payable account
the creditor's account in the accounts payable ledger
the Accounts Payable account and the creditor's account
The Purchases account is debited when
merchandise is bought for resale.
merchandise is bought on account.
merchandise is bought for cash.
all of the above.
A processing stamp is placed on the
packing slip
purchase requisition
invoice
purchase order
Two major advantages of a special journal are that it saves time in recording and posting business transactions.
true
false
The cash register tape is the source document for recording cash and bank card sales.
true
false
Only customer accounts with balances are entered on the schedule of accounts receivable.
true
false
The subsidiary ledger and the controlling account can balance even if an amount was posted to the wrong account.
true
false
Cash sales are recorded in the sales journal.
true
false
Footings are always completed in pencil, and column totals are written in ink.
true
false
Merchandising businesses sell strictly on a cash basis.
true
false
Customer accounts are listed in alphabetical order in the accounts receivable subsidiary ledger.
true
false
After a posting has been made from the sales or cash receipts journal to a customer's account, the customer account number is entered in the Posting Reference column of the journal.
true
false
Postings are made to customer accounts usually at the end of the week.
true
false
The Accounts Receivable Debit column of the sales journal is used to record
the amount of the sale
the amount of the sales tax
the total amount to be received from a customer
the total amount to be paid to a customer
The value of the merchandise sold is recorded in the sales journal in the
Sales Tax Payable Credit column
Sales Credit column
Customer's Account Debited column
Accounts Receivable Debit column
The totals of the Sales Credit column and the Sales Tax Payable Credit column in the sales journal should be posted
at the end of the month
at the end of the week
once every two weeks
on a daily basis
Special journals do the following:
simplify the posting process
simplify the recording process
organize the transactions of a business
all of the above
The amounts recorded in the General Credit column of the cash receipts journal are posted
on the day the transaction occurred
at the end of the week
at the end of the month
once every two weeks
The individual amounts recorded in the Accounts Receivable Credit column of the cash receipts journal are posted
once a week
once every two weeks
once a month
on a daily basis
The following kinds of transactions are recorded in the cash receipts journal except
sale of merchandise on account
cash sale of merchandise
bankcard sales
sale of other assets for cash
Accounts in the accounts payable subsidiary ledger have normal debit balances.
true
false
An invoice dated June 17 with terms 2/10, n/30 must be paid by July 17 to take advantage of the cash discount.
true
false
The Accounts Payable controlling account is found in the general ledger.
true
false
Because a bank service charge is automatically deducted from the checking account of a business, it is not necessary to record an entry in the cash payments journal.
true
false
Special journals should be footed before column totals are proved.
true
false
The purchases journal is used only for recording the purchase of merchandise on account.
true
false
Transactions recorded in either the purchases or cash payments journals that affect accounts payable subsidiary ledger accounts should be posted on a daily basis, that is, as soon as the transaction is recorded.
true
false
Cash is usually proved at the end of the month.
true
false
Check stubs and the bank statement are the only two source documents used for recording transactions in the cash payments journal.
true
false
The special column totals of special journals are always posted at the end of the month.
true
false
recorded bankcard fees for the month
purchased store equipment on account
paid insurance premiums for the next six months
purchased office supplies for cash
purchased merchandise for cash
paid the monthly utility bill
purchased merchandise on account
recorded the bank service charge
paid shipping charges for own merchandise purchased
recorded payment of payroll
A fiscal year is an accounting period that always begins on January 1 and ends on December 31.
true
false
When recording a business transaction, the amount is always entered first because it is the most important part of the journal entry.
true
false
A source document is a business paper that proves a transaction occurred.
true
false
A journal is sometimes called a "book" of original entry because it is where transactions are first entered in the accounting system.
true
false
A check was written on April 15. It is being recorded today, April 17. The date used for recording the transaction is April 17.
true
false
The analysis of a business transaction into its debit and credit parts is required for both manual and computerized accounting systems.
true
false
The different kinds of source documents a business uses depends on the nature of the transaction.
true
false
If an error is discovered before posting occurs, simply draw a line through the incorrect item and write the correct item above it.
true
false
The debit part of a business transaction should be indented one-half inch from the left edge of the paper.
true
false
The accounting cycle is a series of activities a business completes over a period of time.
true
false
Most businesses use an accounting period of:
one month
three months
six months
twelve months
A form listing specific information about a business transaction that involves the buying and selling of goods is a(n):
check
invoice
memorandum (memo)
receipt
Which of the following is a calendar year accounting period?
Jan. 1 - Dec. 31
Feb. 1 - Jan. 31
July 1 - June 30
April 15 - March 31
Which source document is used within the business?
check
invoice
memorandum (memo)
receipt
Which of the following is entered with each transaction?
date
debit account name and amount
credit account name and amount
source document or explanation
all of the above
The accounts in a business are kept in a book called a ledger.
true
false
Posting is the process of transferring information from the journal to the ledger accounts.
true
false
Every posting requires the year, month, and day to be entered in the Date column of the ledger account for every transaction.
true
false
Every journal entry requires a posting to at least two accounts.
true
false
If a transaction is journalized on the 6th, but not posted until the 8th, the date of the posting should be the 8th.
true
false
If an account has a zero balance, it is not necessary to list it on the trial balance.
true
false
A ledger is sometimes called a book of final entry.
true
false
Ideally, all businesses should post on a daily basis; however, businesses having few transactions may post only once a week.
true
false
An example of a transposition error is writing the number 45 when you should have written 54.
true
false
If you discover an error before posting, a correcting entry is required.
true
false
The first step in the posting process is to:
post the amount
enter the page number in the Posting Reference column of the ledger account
enter the date in the Date column of the account debited
compute the new balance
If the total debits and total credits of the trial balance do not agree, the first step in locating the error is to:
re-add the debit and credit columns
find the amount you are out of balance
make certain you copied the amount correctly from the ledger account to the trial balance
divide the amount you are out of balance by 2
All of the following about a trial balance are true except:
it includes all general ledger accounts
it includes only the permanent accounts
it is completed after posting
it proves the ledger
Transposition errors are evenly divisible by the number:
2
3
4
9
Which of the following steps in the accounting cycle is in the correct order?
post the ledger, prepare a trial balance, journalize, analyze each transaction, and collect source documents
analyze each transaction, journalize, collect source documents, prepare a trial balance, and post
collect and verify source documents, analyze each transaction, journalize each transaction, post to the ledger, and prepare a trial balance
collect and verify source documents, analyze each transaction, prepare a trial balance, journalize each transaction, and post to the ledger
