Accounting Quiz 5-7

Which of the following always recorded in the general journal?
-rendering services for cash
-purchases of supplies on account
-rendering services on account
-closing enteries

closing enteries

Some of the more common subsidiary ledgers are:
-Accounts Payable, Accounts Receivable, and Owner’s Equity subsidiary ledgers.
-Accounts Receivable and Accounts Payable subsidiary ledgers.
-Accounts Receivable, Accounts Payable, Cash, Checking, Petty Cash, and Owner’s Equity subsidiary ledgers.
-Cash and Owner’s Equity subsidiary ledgers.

Accounts Receivable and Accounts Payable subsidary ledgers

When posting a column total in the purchases journal, a credit should be posted to
-Merchandise Inventory
-Accounts Payable
-Sales Returns and Allowances
-Cash

Accounts Payable

The cash receipts journal will be used for

all cash received

When there are a large number of individual accounts with a common characteristic, it is common to place them in a separate ledger called a(n)

Subsidiary Ledger

Which of the following accounts normally has a subsidiary ledger?
-capital stock
-retained earnings
-supplies
-accounts payable

accounts payable

The subsidiary ledger that includes customer account activity is called the

account receiveable ledger

Which of the following journals is called an all-purpose journal?
-General journal
-Purchases journal
-Revenue journal
-Accounting journal

General journal

An "Accounts Receivable Subsidiary Ledger" report shows

cash receipts by customer for a specified date range.

A cash purchase of supplies should be recorded in the

Cash Payments journal

Which of the following transactions is recorded in the revenue journal?
-sale of excess office equipment for cash
-rendering services for cash
-rendering services on account
-sale of excess office equipment on account

rendering service on account

A cash investment made by the owner should be recorded on the

cash receipt journal

Services performed for cash should be recorded in the

Cash receipt journal

A withdrawal of cash made by the owner will be found in the

cash payment journal

At the end of the month, the total of the amount column of the revenue journal is posted as a

debit to Accounts Receivable and a credit to Fees Earned

Under the perpetual inventory system, all purchases of merchandise are debited to the account entitled

Merchandise Inventory

When comparing a retail business to a service business, the financial statement that changes the least is the

Statement of Owner’s Equity

Where are selling and administrative expenses found on the multiple-step income statement?

after gross profit

The statement of owner’s equity shows

all the changes in the owner’s capital as a result of net income, net loss, additional investments, and withdrawals

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

debit to Merchandise Inventory

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

single-step statement

Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?

administrative expense

A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

$650

Which account will be included in both service and merchandising companies closing entries?
-Sales
-Cost of Merchandise Sold
-Purchase Discounts
-Sales Returns and Allowances

Sales

When comparing a retail business to a service business, the financial statement that changes the most is the

Income Statement

When goods are shipped FOB destination and the seller pays the freight charges, the buyer

makes no journal entry for the freight

Anthony Company sold Madison Company merchandise on account FOB shipping point, 2/10, net 30, for $10,000. Anthony prepaid the $300 shipping charge. Which of the following entries does Anthony make to record this sale?

Accounts Receivable-Madison, debit $10,000; Sales, credit $10,000, and Accounts Receivable-Madison, debit $300; Cash, credit $300

When the perpetual inventory system is used, the inventory sold is debited to

cost of merchandise sold

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

debit to Cash and a credit to Sales

The inventory system employing accounting records that continuously disclose the amount of inventory is called

perpetual

When a buyer returns merchandise purchased for cash, the buyer may record the transaction using the following entry

debit Cash; credit Merchandise Inventory

If the seller is to pay the freight costs of delivering merchandise, the delivery terms are stated as

FOB destination

Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?

Cash $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr.

Which of the following accounts usually has a debit balance?
-Purchase Discounts
-Sales Tax Payable
-Allowance for Doubtful Accounts
-Freight-In

Freight-In

The inventory costing method that reports the earliest costs in ending inventory is

LIFO

Under the _________ inventory method, accounting records maintain a continuously updated inventory value.

perpetual

The inventory method that assigns the most recent costs to cost of goods sold is

LIFO

Which of the following is used to analyze the efficiency and effectiveness of inventory management?
-inventory turnover only
-number of days’ sales in inventory only
-both inventory turnover and number of days’ sales in inventory
-neither inventory turnover or number of days’ sales in inventory

both inventory turnover and number of days’ sales in inventory

Inventory costing methods place primary emphasis on assumptions about

flow of costs