Accounting_II_Midterm_Review

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					Accounting II Midterm Review (Journals, Ledgers, Payroll, Uncollectible Accounts,
Depreciation)

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____    1. A business expecting to make money and continue in business indefinitely is applying the accounting concept
           ____.
           a. Business Entity                               c. Objective Evidence
           b. Going Concern                                 d. Historical Cost
____    2. A journal used to record only one kind of transaction ____.
           a. is a special journal
           b. is a general journal
           c. must be used by all businesses
           d. increases the time required to journalize transactions
____    3. The price a business pays for goods it purchases to sell is ____.
           a. cost of goods sold                            c. markup
           b. cost of merchandise                           d. cost of sales
____    4. The amount added to the cost of merchandise to establish the selling price is ____.
           a. cost of goods sold                            c. cost of sales
           b. cost of merchandise                           d. markup
____    5. The purchases account is classified as ____.
           a. an expense account                            c. a liability account
           b. an asset account                              d. a cost account
____    6. Recording the actual amount paid for merchandise or other items bought is an application of the accounting
           concept ____.
           a. Business Entity                               c. Historical Cost
           b. Objective Evidence                            d. Going Concern
____    7. A purchases journal is used to journalize ____.
           a. all purchase transactions
           b. all transactions
           c. all purchase of merchandise on account transactions
           d. adjusting entries
____    8. A journal amount column headed with an account title is a ____.
           a. general amount column                         c. general credit column
           b. general debit column                          d. special amount column
____    9. Writing an account title in the Account Title column of a journal is not necessary if the journal has ____.
           a. a Cash Debit column                           c. a Source Doc. column
           b. a Post. Ref. column                           d. special amount columns
____   10. A form describing goods sold, the quantity, and the price is ____.
           a. a check                                       c. an invoice
           b. a receipt                                     d. a memorandum
____   11. The source document for recording a purchase on account transaction is a ____.
           a. purchase invoice                              c. memorandum
           b. sales invoice                                 d. check
____   12. An agreement between a buyer and a seller about payment for merchandise is the ____.
           a. purchase invoice                              c. sales invoice
           b. correcting entry                              d. terms of sale
____ 13. The entry to journalize a purchase of merchandise on account is ____.
         a. debit Accounts Payable; credit Merchandise
         b. debit Accounts Payable; credit Purchases
         c. debit Purchases; credit Accounts Payable
         d. debit Purchases; credit Merchandise
____ 14. A liability account that summarizes the amounts owed to all vendors is titled ____.
         a. Accounts Payable                                c. Sales
         b. Accounts Receivable                             d. Purchases
____ 15. A cash payments journal is used to journalize ____.
         a. all cash transactions                           c. adjusting entries
         b. only cash payment transactions                  d. closing entries
____ 16. Supplies bought for use in a business are recorded in the ____.
         a. supplies expense account                        c. supplies account
         b. purchases account                               d. cash account
____ 17. The entry to journalize buying supplies for cash is ____.
         a. debit Supplies; credit Cash
         b. debit Accounts Payable; credit Supplies
         c. debit Purchases; credit Cash
         d. debit Purchases; credit Supplies
____ 18. The entry to journalize payment to replenish a petty cash fund is ____.
         a. debit Cash; credit Petty Cash
         b. debit Petty Cash; credit Cash
         c. debit the appropriate expense and other accounts; credit Cash
         d. debit the appropriate expense and other accounts; credit Petty Cash
____ 19. What is the formula for calculating the invoice amount?
         a. Total List Price + Trade Discount = Invoice Amount
         b. Total List Price  Trade Discount = Invoice Amount
         c. Total List Price  Trade Discount = Invoice Amount
         d. Total List Price  Trade Discount = Invoice Amount
____ 20. The retail price listed in a catalog or on an Internet site is called the ____.
         a. list price                                      c. full price
         b. markup                                          d. trade discount
____ 21. A business that buys and resells merchandise to retail merchandising businesses is known as a ____.
         a. vendor                                          c. corporation
         b. wholesale merchandising business                d. partnership
____ 22. A form prepared by the customer showing the price deduction taken by the customer for returns and
         allowances is a ____.
         a. memorandum                                      c. purchases allowance
         b. purchase invoice                                d. debit memorandum
____ 23. A deduction that a vendor allows on the invoice amount to encourage prompt payment is called ____.
         a. a cash discount                                 c. a markup
         b. terms of sale                                   d. a trade discount
____ 24. The amount added to the cost of merchandise to establish the selling price is known as the ____.
         a. trade discount                                  c. list price
         b. cash discount                                   d. markup
____ 25. Special amount columns are used for transactions that occur ____.
         a. once every month                                c. infrequently
         b. frequently                                      d. once during the fiscal year
____ 26. The amount of sales tax a business collects is ____.
         a. an asset                                       c. a liability
         b. an expense                                     d. revenue
____ 27. The amount of sales tax collected is recorded in a ____.
         a. combined revenue account                       c. separate liability account
         b. separate ledger                                d. separate revenue account
____ 28. The amount of sales tax on a sale is calculated as price of goods ____.
         a. plus the sales tax rate                        c. minus the sales tax rate
         b. times the sales tax rate                       d. divided by the sales tax rate
____ 29. If a customer buys $300.00 worth of merchandise and the sales tax is 8%, the total bill the customer must pay
         is ____.
         a. $300.00                                        c. $324.00
         b. $304.00                                        d. $342.00
____ 30. An increase in revenue resulting from a sale on account should be recorded ____.
         a. at the time of the sale                        c. at the end of the fiscal period
         b. at the end of each month                       d. when the final payment is made
____ 31. Recording revenue from transactions at the time goods or services are sold is an application of the accounting
         concept ____.
         a. Matching Expenses with Revenue                 c. Realization of Revenue
         b. Objective Evidence                             d. Business Entity
____ 32. A sale in which cash is received for the total amount of the sale at the time of the transaction is a ____.
         a. credit card sale                               c. convenience sale
         b. cash sale                                      d. deferred-payment sale
____ 33. Using a cash register tape as a source document for weekly cash and credit card sales is an application of the
         accounting concept ____.
         a. Matching Expenses with Revenue                 c. Realization of Revenue
         b. Objective Evidence                             d. Business Entity
____ 34. The journal entry for a cash and credit card sales transaction is ____.
         a. debit Cash; credit Sales; credit Sales Tax Payable
         b. debit Cash; debit Sales Tax Payable; credit Sales
         c. debit Sales; credit Cash; credit Sales Tax Payable
         d. debit Sales Tax Payable; debit Cash; credit Sales
____ 35. In a cash sales transaction with sales tax, the ____.
         a. sales tax amount collected is an asset
         b. sales tax amount collected is a liability
         c. balance of the sales account is decreased
         d. balance of the cash account is decreased
____ 36. The total amount due from all charge customers is summarized in a general ledger account titled ____.
         a. Accounts Receivable                            c. Revenue
         b. Accounts Payable                               d. Sales
____ 37. 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
____ 38. A sale on account transaction ____.
         a. increases the balance of the Accounts Payable account
         b. increases the amount to be collected later from a customer
         c. decreases the amount to be collected later from a customer
           d. decreases the balance of the Accounts Receivable account
____ 39.   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
____ 40.   When cash is received on account, the balance of the ____.
           a. cash account decreases                        c. sales tax payable account decreases
           b. sales account increases                       d. accounts receivable account decreases
____ 41.   The journal entry for a cash receipt on account is ____.
           a. debit Cash; credit Accounts Receivable
           b. debit Cash; credit Accounts Payable
           c. debit Accounts Payable; credit Cash
           d. debit Accounts Payable; credit Accounts Receivable
____ 42.   A special journal used to record only sales on account is ____.
           a. a cash journal                                c. a cash receipts journal
           b. a purchases journal                           d. none of the above
____ 43.   Using a sales invoice as a source document for recording a sale on account is an application of the accounting
           concept ____.
           a. Matching Expenses with Revenue                c. Realization of Revenue
           b. Objective Evidence                            d. Business Entity
____ 44.   A special journal used to record only cash receipt transactions is ____.
           a. a cash journal                                c. a cash receipts journal
           b. a purchases journal                           d. none of the above
____ 45.   A form prepared by the vendor showing the amount deducted for returns and allowances is called a ____.
           a. credit memorandum                             c. purchase invoice
           b. sales invoice                                 d. cash receipt
____ 46.   The ledger that contains all accounts needed to prepare financial statements is the ____.
           a. accounts payable ledger                       c. general ledger
           b. accounts receivable ledger                    d. subsidiary ledger
____ 47.   A ledger that is summarized in a single general ledger account is a ____.
           a. ledger                                        c. secondary ledger
           b. controlling ledger                            d. subsidiary ledger
____ 48.   A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on
           account is ____.
           a. an accounts payable ledger                    c. a general ledger
           b. an accounts receivable ledger                 d. none of the above
____ 49.   An account in a general ledger that summarizes all accounts in a subsidiary ledger is ____.
           a. an expense account                            c. a controlling account
           b. a contra account                              d. a capital account
____ 50.   Each account in a subsidiary ledger has ____.
           a. two amount columns                            c. four amount columns
           b. three amount columns                          d. none of the above
____ 51.   The amount on each line of a purchases journal is posted as a ____.
           a. debit to an account in the accounts payable ledger
           b. debit to an account in the accounts receivable ledger
           c. credit to an account in the accounts payable ledger
           d. credit to an account in the accounts receivable ledger
____ 52. Each entry in the purchases journal is an amount that ____.
         a. is to be paid to a vendor                      c. is to be collected from a customer
         b. has been paid to a vendor                      d. none of the above
____ 53. Each entry in the purchases journal is ____.
         a. posted daily                                   c. posted at the end of a month
         b. posted often                                   d. none of the above
____ 54. The total amount of the purchases journal is posted to the general ledger account(s) ____.
         a. Purchases                                      c. Purchases and Accounts Payable
         b. Accounts Payable                               d. none of the above
____ 55. The totals of the General columns of the cash payments journal are posted to ____.
         a. the accounts payable ledger                    c. the general ledger
         b. the accounts receivable ledger                 d. none of the above
____ 56. To indicate that column totals are not to be posted, ____.
         a. a check mark is placed in parentheses under the total
         b. a check mark is placed in the Post. Ref. column of the journal on the total line
         c. nothing is placed under the total
         d. an account number is placed in the Post. Ref. column of the journal
____ 57. A vendor number is written in the Post. Ref. column of the journal as the last posting step to ____.
         a. identify the vendor
         b. start a new journal page
         c. show that posting of this line to the accounts payable ledger is complete
         d. show the general ledger account to which the total was posted
____ 58. When a customer account balance is changed, ____.
         a. the total of all account balances will be less than the balance of the controlling account
         b. all vendor numbers will change
         c. the balance of the controlling account Accounts Receivable is also changed
         d. none of the above
____ 59. To open a new customer account, ____.
         a. the customer name is obtained from the first invoice prepared
         b. the customer number is assigned
         c. the customer name and number are written on the account form
         d. all of the above
____ 60. When a credit is posted to the accounts receivable ledger, ____.
         a. the new amount posted in the Credit column is subtracted from the previous balance
         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
____ 61. The special amount column totals of the cash receipts journal are ____.
         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
____ 62. When posting the Accounts Receivable Credit column total of the cash receipts journal, return to the journal
         and write ____.
         a. the account number in the Post. Ref. column
         b. a check mark under the column total
         c. the account number under the column total in parentheses
         d. none of the above
____ 63. A listing of customer accounts, account balances, and total amount due from all customers is a ____.
         a. schedule of accounts payable                  c. subsidiary ledger
         b. schedule of accounts receivable               d. controlling list
____ 64. A schedule of accounts receivable is prepared ____.
         a. before all current entries are posted
         b. after all current entries are posted
         c. before the special column totals are posted
         d. at the beginning of the month
____ 65. A general ledger sorts and summarizes all information affecting ____.
         a. income statement and balance sheet accounts
         b. accounts receivable accounts
         c. accounts payable accounts
         d. none of the above
____ 66. 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
____ 67. Information to be recorded in the accounts payable ledger is ____.
         a. the date and posting reference information
         b. a debit or credit amount
         c. the new account balance
         d. all of the above
____ 68. 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 the above
____ 69. 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 the above
____ 70. The total of the schedule of accounts receivable should equal ____.
         a. the accounts receivable account balance in the general ledger
         b. the cash account
         c. the debit and credit proof
         d. none of the above
____ 71. The period covered by a salary payment is a ____.
         a. bimonthly base                                c. pay period
         b. pay schedule                                  d. payroll
____ 72. The total amount earned by all employees for a pay period is a ____.
         a. time card                                     c. wage
         b. salary                                        d. payroll
____ 73. The total pay due for a pay period before deductions is ____.
         a. gross pay                                     c. total earnings
         b. gross earnings                                d. all of the above
____ 74. Employee regular earnings are calculated as ____.
         a. regular hours times regular rate              c. total hours plus overtime rate
           b. total hours divided by regular rate           d. overtime hours minus overtime rate
____ 75.   Until payment is made, payroll taxes for an employer are ____.
           a. an asset                                      c. capital
           b. a liability                                   d. an expense
____ 76.   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
____ 77.   All employees must report their withholding allowances on a ____.
           a. payroll register                              c. Form W-4
           b. memorandum                                    d. Form W-2
____ 78.   A deduction from total earnings of each person legally supported by a taxpayer is a ____.
           a. payroll tax                                   c. federal income tax
           b. withholding allowance                         d. worker's allowance
____ 79.   The withholding allowances of an employee affect ____.
           a. social security tax withheld                  c. federal unemployment tax owed
           b. federal income tax withheld                   d. state unemployment tax owed
____ 80.   Medicare is for people who ____.
           a. have a disability                             c. have reached retirement age
           b. are in the hospital                           d. are under 50 years of age
____ 81.   Accurate and detailed payroll records ____.
           a. do not have to be retained
           b. must be maintained
           c. are the responsibility of the employee, not the business
           d. none of the above
____ 82.   A business form used to record payroll information is ____.
           a. a wage register                               c. a payroll register
           b. a payroll tax register                        d. an employee time card
____ 83.   Each employee name is listed in a payroll register along with ____.
           a. employee number                               c. withholding allowances
           b. marital status                                d. all of the above
____ 84.   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 the above
____ 85.   The total earnings paid to an employee after payroll taxes and other deductions is recorded in the payroll
           register ____.
           a. Gross Pay column                              c. Net Pay column
           b. Total Earnings column                         d. Total Deductions column
____ 86.   Individual payroll checks are usually written on ____.
           a. a company's regular checking account          c. a special purposes account
           b. a special payroll checking account            d. an employee earnings account
____ 87.   Some businesses deposit employee net pay directly to each employee bank account by using ____.
           a. payroll checks                                c. EFT
           b. payroll registers                             d. none of the above
____ 88.   A business form used to record details affecting payments made to an employee is ____.
            a. an employee earnings record                     c. an employee accounts payable record
            b. a payroll journal                               d. a tax withholding form
____ 89.    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
____ 90.    The amount on the employee earnings record used to determine if certain payroll taxes apply to an employee's
            earnings is ____.
            a. net pay                                         c. gross earnings
            b. accumulated earnings                            d. social security taxes
____ 91.    All the payroll information needed to prepare a payroll and tax reports is found on ____.
            a. Form W-4 and the employee earnings record
            b. Form W-4 and the payroll register
            c. Form W-4
            d. the payroll register and the employee earnings record
____ 92.    Until the amounts withheld from employee salaries are paid by the employer, they are recorded as ____.
            a. assets                                          c. salary expense
            b. liabilities                                     d. revenue
____ 93.    The source document for payment of a payroll is ____.
            a. a receipt                                       c. a memorandum
            b. a check                                         d. none of the above
____ 94.    The entry to journalize paying a semimonthly payroll less deductions for employee income tax, social security
            and Medicare tax, and U.S. Savings Bonds is a credit to Cash and the liability accounts and a debit to ____.
            a. Salary Expense                                  c. Payroll Taxes Expense
            b. Unemployment Tax Payable-Federal                d. Cash
____ 95.    Employers must pay payroll taxes for ____.
            a. social security and Medicare and sales taxes
            b. social security and Medicare, federal unemployment, and state unemployment taxes
            c. federal income and social security and Medicare taxes
            d. none of the above
____ 96.    The employer social security tax rate is based on ____.
            a. the rate established for employers
            b. the same rate and earnings as employee social security tax
            c. 6.2 percent of wages paid
            d. none of the above
____ 97.    Social security and Medicare taxes are paid by ____.
            a. employers only                                  c. employers and employees
            b. employees only                                  d. none of the above
____ 98.    The total earnings subject to federal unemployment tax is referred to as ____.
            a. unemployment taxable earnings                   c. gross earnings
            b. taxable earnings                                d. total earnings
____ 99.    In the entry to journalize employer payroll taxes expense for a semimonthly period, the account debited would
            be ____.
            a. Salary Expense                                  c. Payroll Taxes Expense
            b. Unemployment Tax Payable-Federal                d. Cash
____ 100.   In the entry to journalize employer payroll taxes expense for a semimonthly period, an account credited would
            be ____.
            a. Salary Expense                                  c. Payroll Taxes Expense
            b. Unemployment Tax Payable-Federal                 d. Cash
____ 101.   Each employer must file a federal tax return showing the federal income tax and social security and Medicare
            taxes due the government ____.
            a. monthly                                          c. yearly
            b. quarterly                                        d. semiannually
____ 102.   Each employer must file a federal tax return showing the federal income tax and social security and Medicare
            taxes due the government on a Form ____.
            a. W-2                                              c. 940
            b. W-3                                              d. 941
____ 103.   The report that shows total year's earnings and amounts withheld for taxes for an employee is prepared on
            Form ____.
            a. W-2                                              c. 940
            b. W-3                                              d. 941
____ 104.   Employers are required to furnish each employee 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
____ 105.   The form used for the transmittal of the previous year's earnings and payroll taxes withheld for all employees
            is Form ____.
            a. W-2                                              c. 940
            b. W-3                                              d. 941
____ 106.   The source document for paying employee income tax and social security and Medicare tax is ____.
            a. a check                                          c. a memorandum
            b. a receipt                                        d. none of the above
____ 107.   In the entry to journalize paying the liability for the first quarter federal unemployment tax, an account
            debited would be ____.
            a. Salary Expense                                   c. Payroll Taxes Expense
            b. Unemployment Tax Payable-Federal                 d. Cash
____ 108.   In the entry to journalize paying the liability for the first quarter federal unemployment tax, the account
            credited would be ____.
            a. Salary Expense                                   c. Payroll Taxes Expense
            b. Unemployment Tax Payable-Federal                 d. Cash
____ 109.   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 the above
____ 110.   The source document for paying state unemployment tax is ____.
            a. a check                                          c. a memorandum
            b. a receipt                                        d. none of the above
____ 111.   The payroll journal entry is based on the totals of ____.
            a. Earnings Total column, each deduction column, and Net Pay column
            b. Earnings Total column, Earnings Regular and Overtime Earnings, and Deductions Total
                 columns
            c. Earnings Regular, Earnings Overtime, and Deductions Total columns
            d. Earnings Total column, Earnings Regular and Earnings Overtime Total columns
____ 112.   The total of the Net Pay column of the payroll register is credited to ____.
            a. a revenue account                             c. an asset account
            b. an expense account                            d. a liability account
____ 113.   When a semimonthly payroll is paid, the credit to Cash is equal to the ____.
            a. total earnings of all employees
            b. total deductions for income tax and social security and Medicare tax
            c. total deductions
            d. net pay of all employees
____ 114.   The Total Earnings column total is journalized as a debit to ____.
            a. Cash                                          c. Employee Income Tax Payable
            b. Salary Expense                                d. Social Security Tax Payable
____ 115.   The total of the Federal Income Tax column of a payroll register is credited to
            a. a revenue account                             c. a liability account
            b. an expense account                            d. an asset account
____ 116.   A federal tax used for state and federal administrative expenses of the unemployment program is ____.
            a. social security tax                           c. federal unemployment tax
            b. Medicare tax                                  d. state unemployment tax
____ 117.   A state tax used to pay benefits to unemployed workers is ____.
            a. social security tax                           c. unemployment tax
            b. Medicare tax                                  d. state unemployment tax
____ 118.   To record the employer payroll taxes expense, the following accounts are credited:
            a. Payroll Taxes Expense and Employee Income Tax Payable
            b. Employee Income Tax Payable, Social Security Tax Payable, Medicare Tax Payable,
                Unemployment Tax Payable-Federal, and Unemployment Tax Payable-State
            c. Social Security Tax Payable, Medicare Tax Payable, Unemployment Tax Payable-Federal,
                and Unemployment Tax Payable-State
            d. none of the above
____ 119.   To record the total federal tax payment for employee income tax, social security tax and Medicare tax, the
            account credited is ____.
            a. Cash                                          c. Social Security Tax Payable
            b. Employee Income Tax Payable                   d. Medicare Care Tax Payable
____ 120.   To record the payment of federal unemployment tax, the account debited is ____.
            a. a revenue account                             c. a liability account
            b. an expense account                            d. an asset account
____ 121.   A business prepares a summary of financial information at least once each fiscal period because financial
            information ____.
            a. is needed to make management decisions
            b. shows whether a profit is being made or a loss is being incurred
            c. is needed to prepare tax reports
            d. all of the above
____ 122.   The distribution of dividends only by formal action of a corporation's board of directors is an application of
            the accounting concept ____.
            a. Accounting Period Cycle                       c. Business Entity
            b. Adequate Disclosure                           d. Historical Cost
____ 123.   The amount of goods on hand for sale to customers is ____.
            a. a merchandise inventory                       c. a schedule of goods on hand
            b. an inventory                                  d. a purchases inventory
____ 124.   The general ledger account in which merchandise inventory is recorded is titled ____.
            a. Merchandise Inventory                         c. Purchases
            b. Inventory                                     d. Purchases Inventory
____ 125. The entry to journalize the adjustment for merchandise inventory at the end of a fiscal period when ending
          merchandise inventory is smaller than the beginning is ____.
          a. debit Merchandise Inventory; credit Income Summary
          b. debit Income Summary; credit Merchandise Inventory
          c. debit Merchandise Inventory; credit capital account
          d. debit capital account; credit Merchandise Inventory
____ 126. The entry to journalize the adjustment for merchandise inventory at the end of a fiscal period when the ending
          merchandise inventory is larger than beginning merchandise inventory is ____.
          a. debit Merchandise Inventory; credit Income Summary
          b. debit Income Summary; credit Merchandise Inventory
          c. debit Merchandise Inventory; credit capital account
          d. debit capital account; credit Merchandise Inventory
____ 127. The entry to journalize the adjustment for merchandise inventory when beginning Merchandise Inventory is
          $125,000.00 and ending Merchandise Inventory is $115,000.00 is ____.
          a. debit Merchandise Inventory, $10,000.00; credit Income Summary, $10,000.00
          b. debit Income Summary, $10,000.00; credit Merchandise Inventory, $10,000.00
          c. debit Merchandise Inventory $115,000.00; credit Income Summary, $115,000.00
          d. debit Income Summary, $115,000.00; credit Merchandise Inventory, $115,000.00
____ 128. The entry to journalize the adjustment for office supplies at the end of a fiscal period is ____.
          a. debit Supplies--Office; credit Supplies Inventory
          b. debit Supplies Inventory; credit Supplies--Office
          c. debit Supplies--Office; credit Supplies Expense--Office
          d. debit Supplies Expense--Office; credit Supplies--Office
____ 129. The entry to journalize the adjustment for office supplies at the end of a fiscal period when the balance of the
          office supplies account is $5,100.00 and the office supplies inventory is $3,900.00 is ____.
          a. debit Supplies Expense--Office, $1,200.00; credit Supplies--Office, $1,200.00
          b. debit Supplies Expense--Office, $3,900.00; credit Supplies--Office, $3,900.00
          c. debit Supplies--Office, $1,200.00; credit Supplies Inventory, $1,200.00
          d. debit Supplies Expense--Office, $3,900.00; credit Supplies Inventory, $3,900.00
____ 130. The entry to journalize the adjustment for prepaid insurance at the end of a fiscal period is ____.
          a. debit Prepaid Insurance; credit Cash
          b. debit Cash; credit Prepaid Insurance
          c. debit Insurance Expense; credit Prepaid Insurance
          d. debit Prepaid Insurance; credit Insurance Expense
____ 131. The entry to adjust prepaid insurance at the end of a fiscal period when the balance of the prepaid insurance
          account is $3,600.00 and the value of the prepaid insurance is $1,600.00 is ____.
          a. debit Insurance Expense, $1,600.00; credit Prepaid Insurance, $1,600.00
          b. debit Insurance Expense, $2,000.00; credit Prepaid Insurance, $2,000.00
          c. debit Prepaid Insurance, $1,600.00; credit Insurance Expense, $1,600.00
          d. debit Prepaid Insurance, $2,000.00; credit Insurance Expense, $2,000.00
____ 132. A work sheet is used to ____.
          a. plan adjustments
          b. summarize information necessary to prepare financial statements
          c. both A and B
          d. neither A nor B
____ 133. What is the formula for calculating book value?
          a. Original Cost  Accumulated Depreciation = Ending Book Value
          b. Original Cost  Accumulated Depreciation = Ending Book Value
          c. Original Cost  Accumulated Depreciation = Ending Book Value
            d. Original Cost  Accumulated Depreciation = Ending Book Value
____ 134.   The Supplies--Office amount in a work sheet's Trial Balance Debit column represents the value of supplies
            ____.
            a. bought during a fiscal period
            b. at the beginning of a fiscal period
            c. used during a fiscal period
            d. at the beginning of a fiscal period plus office supplies bought during the fiscal period
____ 135.   The portion of the insurance premiums that has expired during a fiscal period is classified as ____.
            a. capital                                         c. a liability
            b. an expense                                      d. an asset
____ 136.   The Merchandise Inventory amount in a work sheet's Trial Balance Debit column represents the merchandise
            inventory ____.
            a. at the beginning of a fiscal period             c. purchased during a fiscal period
            b. at the end of a fiscal period                   d. available during a fiscal period
____ 137.   The two accounts used to record the adjustment for federal income tax are ____.
            a. Federal Income Tax Expense and Federal Income Tax Adjustments
            b. Federal Income Tax Expense and Allowance for Federal Tax Expense
            c. Federal Income Tax Expense and Taxes Payable
            d. Federal Income Tax Payable and Federal Income Tax Expense
____ 138.   Recording expenses in the accounting period in which the expenses contribute to earning revenue is an
            application of the accounting concept ____.
            a. Adequate Disclosure                             c. Matching Expenses with Revenue
            b. Historical Cost                                 d. Consistent Reporting
____ 139.   The Income Summary amount in a work sheet's Adjustments Debit column represents the ____.
            a. decrease in Merchandise Inventory               c. beginning Merchandise Inventory
            b. increase in Merchandise Inventory               d. ending Merchandise Inventory
____ 140.   The two accounts used to adjust the uncollectible accounts are ____.
            a. Accounts Receivable and Uncollectible Accounts Expense
            b. Accounts Receivable and Allowance for Uncollectible Accounts
            c. Uncollectible Accounts Expense and Allowance for Uncollectible Accounts
            d. Accounts Receivable and Accounts Receivable Expense
____ 141.   In calculating the annual amount of depreciation expense for a plant asset, you must consider ____.
            a. original cost                                   c. estimated useful life
            b. estimated salvage value                         d. all of the above
____ 142.   The useful life of a plant asset is affected by ____.
            a. functional depreciation                         c. both A and B
            b. physical depreciation                           d. neither A nor B
____ 143.   Computers, sales display cases, furniture, and cash registers are examples of ____.
            a. current assets                                  c. both A and B
            b. plant assets                                    d. neither A nor B
____ 144.   Which account is used for the investment of all owners of a corporation?
            a. Owners' Equity                                  c. Retained Earnings
            b. Dividends                                       d. Capital Stock
____ 145.   Businesses may have three major types of plant assets: ____.
            a. equipment, buildings, and land                  c. equipment, cash, and land
            b. cash, buildings, and land                       d. cash, buildings, and equipment
____ 146.   The loss from an uncollectible account is ____.
            a. a liability                                     c. an asset
            b. a regular expense of doing business           d. a reduction in revenue
____ 147.   When the percentage of total sales on account method is used, the estimated uncollectible accounts expense is
            calculated by ____.
            a. multiplying total sales on account times the percentage
            b. dividing total sales on account by the percentage
            c. multiplying total sales times the percentage
            d. dividing total sales by the percentage
____ 148.   Estimating the percentage of uncollectible accounts expense at the end of a fiscal period is an application of
            the accounting concept ____.
            a. Business Entity                               c. Realization of Revenue
            b. Objective Evidence                            d. Matching Expenses with Revenue
____ 149.   An Allowance for Uncollectible Accounts balance in the Trial Balance Credit column of a work sheet means
            ____.
            a. there are no uncollectible accounts
            b. the estimate has not yet been recorded
            c. previous fiscal period estimates have not yet been identified as uncollectible
            d. equity has been maintained
____ 150.   When the allowance account in the Trial Balance column of a work sheet has a credit balance, the amount of
            the adjustment is ____.
            a. deducted from the trial balance amount        c. multiplied by two
            b. not recorded                                  d. added to the Trial Balance amount
____ 151.   Information used to journalize an uncollectible expense adjusting entry is obtained from a work sheet's ____.
            a. Balance Sheet columns                         c. Adjustments columns
            b. Income Statement columns                      d. Trial Balance column
____ 152.   The entry to journalize the uncollectible accounts expense adjusting entry is debit Uncollectible Accounts
            Expense and credit ____.
            a. Accounts Receivable                           c. Allowance for Uncollectible Accounts
            b. Cash                                          d. none of the above
____ 153.   When an account is determined to be uncollectible, ____.
            a. a journal entry is made to cancel the uncollectible account
            b. the account is removed from the general ledger
            c. the amount is deducted from sales
            d. the customer subsidiary ledger account is removed
____ 154.   Canceling the balance of a customer account because the customer does not pay is ____.
            a. an adjusting entry                            c. a closing entry
            b. writing off an account                        d. none of the above
____ 155.   Writing off an account ____.
            a. decreases the balance of Accounts Receivable
            b. decreases the balance of Uncollectible Accounts Expense
            c. increases the balance of Allowance for Uncollectible Accounts
            d. increases the balance of Cash
____ 156.   When uncollectible accounts are estimated, writing off an account ____.
            a. increases revenue
            b. increases expenses
            c. does not change the book value of accounts receivable
            d. may increase expenses or decrease revenue
____ 157.   The entry to write off an account receivable is recorded in the ____.
            a. sales journal                                 c. cash payments journal
            b. cash receipts journal                         d. general journal
____ 158. The journal entry to write off an account receivable account is debit Allowance for Uncollectible Accounts
          and credit ____.
          a. Cash                                           c. Uncollectible Accounts Expense
          b. Accounts Receivable                            d. none of the above
____ 159. The journal entry to reopen an account that has been written off is debit Accounts Receivable and credit ____.
          a. Cash                                           c. Uncollectible Accounts Expense
          b. Allowance for Uncollectible Accounts           d. none of the above
____ 160. The journal entry to record receipt of cash for an account previously written off is debit Cash and credit ____.
          a. Accounts Receivable                            c. Uncollectible Accounts Expense
          b. Allowance for Uncollectible Accounts           d. none of the above
____ 161. After the entries are made to reopen a customer account and record collection of the account, the customer
          account balance is ____.
          a. a debit                                        c. zero
          b. a credit                                       d. none of the above
____ 162. At the end of a fiscal period, the account debited to show the estimated amount of uncollectible accounts is
          ____.
          a. Accounts Receivable                            c. Uncollectible Accounts Expense
          b. Cash                                           d. Allowance for Uncollectible Accounts
____ 163. To reopen an account previously written off, ____.
          a. one general journal entry is recorded
          b. two general journal entries are recorded
          c. no journal entries are recorded
          d. one general journal entry and one cash receipts journal entry are recorded
____ 164. At the end of a fiscal period, the account credited to show the estimated amount of uncollectible accounts is
          ____.
          a. Cash                                           c. Accounts Receivable
          b. Uncollectible Accounts Expense                 d. Allowance for Uncollectible Accounts
____ 165. When the account Allowance for Uncollectible Accounts is used, a customer past-due account is written off
          as uncollectible by ____.
          a. debiting Uncollectible Accounts Expense and crediting Accounts Receivable and the
              customer account
          b. debiting Allowance for Uncollectible Accounts and crediting Accounts Receivable and the
              customer account
          c. debiting Accounts Receivable and the customer account and crediting Allowance for
              Uncollectible Accounts
          d. none of these
____ 166. Some examples of plant assets are ____.
          a. prepaid insurance, computers, and supplies
          b. cash, supplies, and furniture
          c. computers, cash registers, and display cases
          d. none of the above
____ 167. The telephones a company buys and resells to its customers are included in the general ledger account ____.
          a. Merchandise Inventory                          c. Equipment
          b. Supplies                                       d. Accounts Payable
____ 168. Recording a plant asset at cost is an application of the accounting concept ____.
          a. Objective Evidence                             c. Matching Expenses with Revenue
          b. Going Concern                                  d. Historical Cost
____ 169. Expensing the cost of a plant asset over the plant asset's useful life is an application of the accounting concept
          ____.
            a. Matching Expenses with Revenue                 c. Objective Evidence
            b. Going Concern                                  d. Historical Cost
____ 170.   The purpose of recording depreciation is to ____.
            a. earn revenue
            b. recover the cash spent on plant assets
            c. record an expense in the periods in which the asset is used to earn revenue
            d. earn money to replace the asset
____ 171.   Generally, a business removes a plant asset from use and disposes of it ____.
            a. when a profit can be made on the disposal
            b. when the asset is no longer usable
            c. when the asset is three years old
            d. at the end of each fiscal year
____ 172.   The total depreciation expense for a fax machine purchased for $700.00 with an estimated salvage value of
            $100.00 is ____.
            a. $800.00                                        c. $600.00
            b. $700.00                                        d. $100.00
____ 173.   The annual depreciation expense for a fax machine purchased for $700.00 with an estimated salvage value of
            $100.00 and a useful life of five years is ____.
            a. $100.00                                        c. $140.00
            b. $120.00                                        d. $160.00
____ 174.   The monthly depreciation expense for a fax machine purchased for $700.00 with an estimated salvage value
            of $100.00 and a useful life of five years is ____.
            a. $100.00                                        c. $50.00
            b. $75.00                                         d. $10.00
____ 175.   Book value of a plant asset is original cost ____.
            a. plus accumulated depreciation                  c. plus salvage value
            b. minus accumulated depreciation                 d. minus salvage value
____ 176.   The journal entry to record the adjustment for office equipment depreciation is debit Depreciation Expense-
            Office Equipment and credit ____.
            a. Office Equipment
            b. Accumulated Depreciation-Office Equipment
            c. Cash
            d. none of the above
____ 177.   When a plant asset is disposed of, a journal entry is recorded that ____.
            a. recognizes the annual depreciation
            b. removes the amount owed on the plant asset from Accounts Payable
            c. closes the depreciation expense account to Income Summary
            d. removes the original cost of the plant asset and its related accumulated depreciation
____ 178.   The journal entry to record the sale of office equipment for book value is debit Cash and ____.
            a. credit Office Equipment
            b. debit Accumulated Depreciation--Office Equipment; credit Office Equipment
            c. debit Office Equipment; credit Accumulated Depreciation--Office Equipment
            d. none of the above
____ 179.   If a plant asset costs $1,200.00, has accumulated depreciation of $1,000.00, and is sold for $200.00, the gain
            or loss on disposal is ____.
            a. $200.00 gain                                   c. no gain or loss
            b. $200.00 loss                                   d. $1,000.00 loss
____ 180.   The journal entry to record the sale of office equipment for more than the book value is debit Cash and ____.
            a. credit Office Equipment
            b. debit Accumulated Depreciation--Office Equipment; credit Office Equipment and Gain on
                 Plant Assets
            c. debit Office Equipment; credit Accumulated Depreciation--Office Equipment and Gain on
                 Plant Assets
            d. none of the above
____ 181.   If a plant asset costs $4,000.00, has accumulated depreciation of $3,200.00, and is sold for $900.00, the gain
            or loss on disposal is ____.
            a. $900.00 gain                                     c. $100.00 loss
            b. $800.00 loss                                     d. $100.00 gain
____ 182.   If a plant asset costs $700.00, has accumulated depreciation of $550.00, and is sold for $100.00, the gain or
            loss on disposal is ____.
            a. $50.00 loss                                      c. $150.00 loss
            b. $100.00 gain                                     d. $450.00 gain
____ 183.   The journal entry to record the payment of property tax is ____.
            a. debit Cash; credit Taxes Expense
            b. debit Taxes Expense; credit Cash
            c. debit Cash; credit Property Tax Expense
            d. debit Property Tax Expense; credit Cash
____ 184.   The amount by which a plant asset depreciates is classified as ____.
            a. revenue                                          c. an expense
            b. a liability                                      d. an asset
____ 185.   Depreciation expense for a plant asset is recorded ____.
            a. when the asset is bought
            b. after the asset is sold
            c. when the asset is repaired
            d. at the end of each fiscal period during the asset's estimated useful life
____ 186.   The smallest unit of time used to calculate depreciation is ____.
            a. one month                                        c. one year
            b. half a year                                      d. none of the above
____ 187.   The accumulated depreciation account should show ____.
            a. total depreciation for plant assets since the business was formed
            b. total depreciation for plant assets still in use
            c. only total depreciation expense for plant assets for the current year
            d. next year's estimated depreciation for plant assets
____ 188.   When a plant asset is sold for more than the asset's book value, ____.
            a. cash received plus accumulated depreciation plus gain on disposal equals original cost
                 plus gain on disposal
            b. cash received plus accumulated depreciation equals original cost plus gain on disposal
            c. cash received plus accumulated depreciation plus loss on disposal equals original cost
            d. cash received plus accumulated depreciation equals original cost plus loss on disposal
____ 189.   The plant asset land is classified as real property and is ____.
            a. depreciated using the declining-balance method of depreciation
            b. depreciated using the same method used for other plant assets
            c. depreciated without considering estimated salvage value because of its permanent nature
            d. generally not depreciated
____ 190.   The double-declining balance method of depreciation ____.
            a. records a greater depreciation expense in the early years of an asset's useful life
            b. records a lesser depreciation expense in the early years of an asset's useful life
            c. slows down the recording of depreciation in the early years of an asset's useful life
d. accelerates the recording of depreciation in the later years of an asset's useful life
Accounting II Midterm Review (Journals, Ledgers, Payroll, Uncollectible Accounts,
Depreciation)
Answer Section

MULTIPLE CHOICE

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