Accounting Skills Test Review Vocabulary Checking Financial Statements

Accounting Skills Test Review Vocabulary Checking Financial Statements Accounting Equation Journals Misc. 10 10 10 20 30 40 50 20 30 40 50 60 70 80 90 100 60 70 80 90 100 Final

Vocabulary - 10 • What is the length of time for which a business analyzes and reports financial data? – – term trial balance worksheet fiscal period

Vocabulary - 20 • When financial records for a business and its owner’s personal belongings are kept separate, this is an application of which concept? a) b) c) d) Business Entity Adequate Disclosure Consistent Reporting Going Concern

Vocabulary - 30 • Which accounting concept assumes that the business will continue to operate indefinitely? a) b) c) d) Consistent Reporting Going Concern Adequate Disclosure Business Entity

Vocabulary - 40 • The steps completed to record financial information for a fiscal period is known as the accounting ______ a) b) c) d) system cycle method equation

Vocabulary - 50 • What is the term for recording business transactions in chronological order? a) b) c) d) Balancing accounts Journalizing Posting Analyzing transactions

Vocabulary - 60 • Which of the following is used to make sound business decisions about the financial status of a company? a) b) c) d) journals Financial statements Source documents ledgers

Vocabulary - 70 • What is the term for the owner’s net worth in a business a) b) c) d) Owner’s equity asset expense liability

Vocabulary - 80 • What is an economic event that affects at least two accounts? a) b) c) d) Business transaction Drawing/withdrawal expense revenue

Vocabulary - 90 • What document shows a list of all accounts and their account numbers? a) b) c) d) Chart of Accounts Balance sheet Income Statement Source document

Vocabulary - 100 • What accounts are closed at the end of a fiscal period? a) liability b) permanent c) temporary d) asset

Checking - 10 • What is a check that has been written but not presented to a bank for payment? a) b) c) d) Deposited check Cashed check Outstanding check Voided check

Checking - 20 • What are deposits made by a depositor but not shown on a bank statement? a) b) c) d) Canceled checks Outstanding deposits Post-dated depostis

Checking - 30 • How does a NSF/dishonored check affect the checkbook balance? a) b) c) d) Decreases cash Increases cash Decreases petty cash Decreases cash

Checking - 40 What is a check returned by the bank because there are not enough funds in the drawer’s checking account? a) b) c) d) Canceled check Outstanding check Dishonored/NSF check Voided check

Checking - 50 When a check is endorsed with only the payee’s signature, this is known as a a) b) c) d) Special Endorsement Blank Endorsement Owner’s Endorsement Restrictive Endorsement

Checking - 60 When a check endorsement includes the words “pay to the order of” and the name of a new payee, this is known as a a) b) c) d) Special Endorsement Blank Endorsement Owner’s Endorsement Restrictive Endorsement

Checking - 70 What is the term for bringing a bank statement and a checkbook into agreement? a) b) c) d) Posting a bank statement Reconciling a bank statement Journalizing a bank statement Preparing a bank statement

Checking - 80 What type of check endorsement includes the words “For Deposit Only”? a) b) c) d) Restrictive endorsement Endorsement in full Blank endorsement Special endorsement

Checking - 90 What is the entry to record a bank service charge? a) Debit Dishonored Check Charge and credit Cash b) Debit Misc. Expense and credit Petty Cash c) Debit Cash and credit Misc. Expense d) Debit Misc. Expense and credit Cash

Checking - 100 The following information is obtained from the bank statement and from the records of the business. What is the adjusted balance after the bank reconciliation is prepared? a) b) c) d) $2, 490 $2, 700 $2, 110 $2, 300 Bank statement balance: $2, 500 Bank Service Charge: $10 Outstanding deposits: $750 Outstanding checks: $950 Checkbook balance: $2310

Financial Statements - 10 Which date range represents a fiscal year? a) b) c) d) August 1, 2011 to July 31, 2012 October 1, 2011 to December 21, 2011 November 1, 2011 to January 21, 2012 January 1, 2011 to June 30, 2011

Financial Statements - 20 What form is used to prove equality of debits and credits after posting? a) b) c) d) Chart of Accounts Income Statement Journal Trial Balance

Financial Statements - 30 What is a financial statement that reports assets, liabilities, and capital on a specific date? a) b) c) d) General Ledger Cash Flow Statement Balance Sheet Income Statement

Financial Statements - 40 How is the date written on the August income statement? a) b) c) d) For Month Ended August 21, 2013 August 31, 2013 8/31/2013 August 2013

Financial Statements - 50 All asset account balances are shown on which financial statement? a) b) c) d) Income Statement of Owner’s Equity Balance Sheet Distribution of Net Income

Financial Statements - 60 When preparing a trial balance, where all account balances obtained? a) b) c) d) Balance Sheet General Journal Income Statement General Ledger

Financial Statements - 70 How is net income calculated? a) b) c) d) Assets minus liabilities Revenue minus expenses Expenses plus revenue minus drawing Assets minus expenses

Financial Statements - 80 Which of the following groups of accounts are included in a post-closing trial balance? – – Assets, liabilities, expenses Assets, revenue, capital Assets, liabilities, capital Revenue, expenses, drawing/withdrawals

Financial Statements - 90 What are three sections of an Income Statement? a) b) c) d) Revenue, liabilities, net income/loss Assets, liabilities, owner’s equity Revenue, expenses, owner’s equity Revenue, assets, expenses

Financial Statements - 100 If revenue/sales is $1, 000, advertising expense is $300, miscellaneous expense is $100, and rent expense is $800, what is the result? a) b) c) d) Net loss of $200 Net income of $200 Net loss of $1, 200 Net income of $1, 200

Accounting Equation - 10 The accounting equation is: a) b) c) d) Assets + liabilities = owner’s equity Assets = liabilities + owner’s equity Revenue – Expenses = Net Income Assets = liabilities – owner’s equity

Accounting Equation - 20 How is the accounting equation affected when a business pays cash for rent? a) Liabilities increase and owner’s equity decreases b) Assets decrease and expenses increase c) Assets increase and expenses decrease d) Assets decrease and owner’s equity increases

Accounting Equation - 30 What account classification is Accounts Receivable? a) b) c) d) expense revenue asset Owner’s equity

Accounting Equation - 40 What is the term for an amount owed by a business? a) b) c) d) expense liability Asset Owner’s equity

Accounting Equation - 50 What is one way owner’s equity is increased? a) b) c) d) Net income Owner’s withdrawal of merchandise Net loss Owner’s withdrawal of cash

Accounting Equation - 60 How are assets affected when the owner invests $1, 000 in the business? a) b) c) d) Decreased by $2, 000 Decreased by $1, 000 Increased by $2, 000

Accounting Equation - 70 Which is the following accounts is a liability account? a) b) c) d) Cash Accounts Payable Accounts Receivable Capital

Accounting Equation - 80 How is the accounting equation affected when the Garcia Company buys supplies for cash? a) One asset increases and owner’s equity decreases b) One asset increases and one asset decreases c) One asset increases and one expense increases d) One asset decreases and owner’s equity decreases

Accounting Equation - 90 How is the accounting equation affected when cash is paid for equipment? a) b) c) d) An asset and a liability are changed Two assets are changed An asset and capital are changed Two liabilities are changed

Accounting Equation - 100 What is the balance of owner’s equity if assets equal $32, 750 and liabilities equal $14, 800? a) b) c) d) $17, 950 $17, 150 $47, 550 $47, 250

Journals - 10 Which statement is true regarding the accuracy of a journal? a) b) c) d) Debits should equal credits Debits should be greater than credits Credits should be greater than debits Debits mean decrease and credits mean increase

Journals - 20 If an error in journalizing is discovered after posting, what should be done? a) b) c) d) Erase the journal entry Write the correction above the error Journalize the correcting entry Draw a line through the journal entry

Journals - 30 What is the journal entry when a check is received from a customer to apply on account? a) b) c) d) Debit Cash and credit Accounts Payable Debit Cash and credit Accounts Receivable Debit Accounts Receivable and credit Cash Debit Accounts Payable and credit Cash

Journals - 40 What is the entry to establish a petty cash fund? a) b) c) d) Debit Misc. Expense and credit Cash Debit Cash and credit Petty Cash Debit Petty Cash and credit Misc. Expense

Journals - 50 Where are individual account balance located? a) b) c) d) Journal Entries Income Statement General Journal General Ledger

Journals - 60 What is the next step in the accounting cycle after analyzing a source document? a) b) c) d) Preparing financial statements Posting to the ledger Recording transactions in a journal Preparing the trial balance

Journals - 70 Which transaction closes expense accounts? a) b) c) d) Debit Expenses and credit Capital Debit Expenses and credit Income Summary Debit Capital and credit Expenses Debit Income Summary and credit expenses

Journals - 80 After the closing entries, which account would still have a balance? a) b) c) d) Revenue/Sales Drawing/Withdrawals Capital Income Summary

Journals - 90 What is the journal entry when a check is written to make payment on account? a) b) c) d) Debit Cash and credit Accounts Receivable Debit Accounts Receivable and credit Cash Debit Accounts Payable and credit Cash Debit Cash and credit Accounts Payable

Journals - 100 What transaction closes the income summary account with a net loss? a) Debit Income Summary and credit Revenue/Sales b) Debit Capital and credit Revenue/Sales c) Debit Capital and credit Income Summary d) Debit Income Summary and credit Capital

Misc. - 10 What is the term for a business owned by one person? a) b) c) d) proprietorship Partnership cooperative corporation

Misc. - 20 What type of business charges a fee for work performed? a) b) c) d) Merchandising business Retail business Manufacturing business Service business

Misc. - 30 How is the capital account affected when the owner invests cash in a business? a) b) c) d) Increased by a credit Increased by a debit Decreased by a credit Decreased by a debit

Misc. - 40 How is the accounting equation affected if a business receives $5, 000 from revenue/sales? a) Decrease assets and decrease revenue b) Increase liabilities and decrease owner’s equity c) Increase asssets and decrease liabilities d) Increase assets and increase revenue

Misc. - 50 How are accounts affected when the owner withdraws cash for personal use? a) Assets decrease and drawing/withdrawals increase b) Liabilities increase and assets decrease c) Assets decrease and drawing/withdrawals decrease d) Liabilities decrease and assets decrease

Misc. - 60 What is the process of transferring amounts for a journal to a ledger? a) b) c) d) Balancing Posting Reconciling Journalizing

Misc. - 70 At the beginning of a new fiscal period, what is the balance of accounts that have been closed? a) b) c) d) credit zero debit unchanged

Misc. - 80 What account is debited when a company pays for a radio commercial? a) b) c) d) Supplies Expense Miscellaneous Expense Cash Advertising Expense

Misc. - 90 Beginning capital is $30, 000, revenue/sales is $4000, expenses are $1, 500, and the owner’s drawing/withdrawals account has a $500 balance. What is the updated capital account balance? A. $25, 000 B. $32, 000 C. $28, 000 D. $34, 000

Misc. - 100 Accounts receivable had a balance of $1, 500 on May 31. There were debit postings of $900 and credit postings of $700 during June. What was the accounts receivable balance on June 30? A. $1, 700 credit B. $1, 300 debit C. $1, 300 credit D. $1, 700 debit

Final • To prepare for the competency test, which option is your best bet for a great score? a) b) c) d) Bribe your teacher Sleep during the test Stay up late Study hard

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