ACCT 1220 Chapter Notes - Chapter 2: Current Liability, Deferral, Book Value

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15 Jan 2018

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Statement of financial position (balance sheet)- s(cid:374)apshot of (cid:272)o(cid:373)pa(cid:374)y"s fi(cid:374)a(cid:374)(cid:272)ial positio(cid:374). Assets: resources that a company owns or controls that will provide future economic benefits. Current assets: assets that are expected to be converted into cash or will be sold or used up (cid:449)ithi(cid:374) o(cid:374)e yea(cid:396) of the (cid:272)o(cid:373)pa(cid:374)y"s fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)t date o(cid:396) its ope(cid:396)ati(cid:374)g (cid:272)y(cid:272)le, (cid:449)hi(cid:272)he(cid:448)e(cid:396) is longer. Operating cycle: is the average period of time it takes for a business to pay cash to obtain products or services and then receive cash from customers from these products or services. Trading investments: investments in debt securities and you will sell in short period of time. Other receivables such as interest, sales tax, etc. are not supported by invoice (accrued revenues). Notes receivable: amounts owed to the company by customers or others that are supported by a written promise to repay. Prepaid expenses: cost of rent or insurance paid in advance of use.

Related Questions

Multiple Choice:

31. The Balance Sheet will report a company'sfinancial position:

a. For a period of time

b. As of a point in time

c. Either A or B

d. Both A and B

32. In the Customers & Sales center, youcan create a new quote by:

a. Clicking the Sales Invoice icon and selecting New Quote

b. Clicking the Sales icon and selecting New Quote

c. Clicking the Customer Quotes icon and selecting NewQuote
d. Clicking the Quote & Proposals and selecting New Quote

. 33. The Statement of Retained Earnings beginswith the beginning balance followed by:

a. Plus net Income (loss) less dividends

b. Plus net Income (loss) plus investments

c. Plus investments less dividends

d. Plus investments plus net Income (loss) less dividends

34. Gross profit equals net sales minus:

a. Interest income

b. Finance charges

c. Other income

d. Cost of sales

35. The Income Statement's net income or (netloss) is also shown on the:

a. Income statement's revenue section

b. Balance sheet's capital section

c. Departmental gross profit totals

d. Cash balance at the end of the period

36. Financing activities involve:

a. Lending money

b. Owner investments

c. Depreciation

d. Acquiring long-lived assets

37. The Customers icon on the Customers &Sales center allows you to:

a. Create customers

b. View and edit customers

c. Write letters to customers

d. All the above

38. On the Navigation Bar, make the followingselections to record a sales return:

a. Customers & Sales Navigation Center; click on the Creditsand Returns icon and select Make Payment to Customer, select thecustomer, type the invoice number

b. Customers & Sales Navigation Center; click on the Creditsand Returns icon and select New Credit Memo.

c. Customers & Sales Navigation Center; click on the SalesInvoices icon and select New Sales Invoice

d. Customers & Sales Navigation Center; click on the Creditsand Returns icon and select View and Edit Credit Memos

39. The order of activities on the statement ofcash flows is:

a. Operating, investing, and financing

b. Operating, financing, and investing

c. Financing, operating, and investing

d. Financing, investing, and operating

40. The following would be included in theheading of all financial statements:

a. Title of the statement

b. Name of the business

c. Period of time covered by the statement

d. All of the above

emeraldcod140

QUESTION 21 A journal entry for a $75 payment for Rent expensewas posted as a debit to Salary expense and a credit to Cash. Thiserror will cause which of the following conditions on the trialbalance? A. The sum of the credits will equal the sum of thedebits. B. The sum of the debits will exceed the sum of the creditsby $75. C. The sum of the credits will exceed the sum of the debitsby $150. D. The sum of the debits will exceed the sum of thecredits by $150.

QUESTION 22 The business receives cash from a customer that isowed to the company "on account," based on services rendered to thecustomer previously. How does the collection of the cash affect theaccounting equation? A. Assets increase; owner's equity increases.B. Assets increase; liabilities increase. C. Assets decrease;owner's equity decreases. D. One asset increases; one assetdecreases

QUESTION 23 A business completes service to a client and sendsout a sales invoice. The amount will be collected from the customerat a later time. Which of the following would be TRUE at the timewhen the invoice is sent out? A. Total assets will decrease. B. Netincome will increase. C. Owner's equity will decrease. D. Totalliabilities will increase.

QUESTION 24 Which of the following accounts increases with adebit? A. Cash B. Interest Payable C. Accounts Payable D. Smith,Capital

QUESTION 25 The Accounts Receivable account of Nuptials Inc. isshown below. Accounts Receivable Dr Cr 26,000 3,500 5,000 Calculatethe ending balance of the account. A. $33,500 debit B. $31,000,debit C. $3,500, credit D. $27,500, debit

QUESTION 26 The following transactions for the month of Marchhave been journalized and posted to the proper accounts. Mar. 1Martinez invested $9,000 cash in his new design services business.Mar. 2 Paid the first month's rent of $800. Mar. 3 Purchasedequipment by paying $3,000 cash and executing a note payable for$5,000. Mar. 4 Purchased office supplies for $750 cash. Mar. 5Billed a client for $10,000 of design services completed. Mar. 6Received $8,000 on account for the services previously recorded.What is the balance in Cash? A. $13,250 B. $12,450 C. $15,450 D.$14,000

QUESTION 27 Which of the following sequences states the order inwhich a trial balance lists accounts? A. Equity â Assets âLiabilities B. Liabilities â Assets â Equity C. Assets â Equity âLiabilities D. Assets â Liabilities â Equity

QUESTION 28 Which of the following statements is FALSE? A. Atrial balance shows total amounts for assets, liabilities, andequity. B. A trial balance is created before the balance sheet isprepared. C. A trial balance presents data in debit and creditformat, but a balance sheet does not. D. A trial balance showstotal debits and total credits.

QUESTION 29 A promise received from a business's customers topay for goods and services that they received from the business iscalled a(n): A. revenue. B. account receivable. C. account payable.D. expense.

QUESTION 30 You can evaluate the economic resources, debt, andoverall financial position of a company in which of the followingfinancial statements? A. Income statement B. Balance sheet C.Statement of owner's equity D. Statement of cash flows

QUESTION 31 A book holding all of the accounts is called the: A.income statement. B. journal. C. ledger. D. balance sheet.

QUESTION 32 Which of the following groups of accounts BOTHnormally have a debit balance? A. Assets and Liabilities B.Liabilities and Owner's equity C. Revenues and Expenses D. Assetsand Expenses

QUESTION 33 A business buys $500 of supplies on account. Whichaccount is debited? A. Supplies B. Cash C. Service revenue D.Accounts payable

Multiple Choice:

21. All the following are true regarding Quotesexcept:

a. Quotes post entries to general ledger accounts

b. Quotes can be transferred to create an invoice

c. Quotes can be linked to customer jobs

d. Quotes can be linked to items

22. If a customer was overcharged for theservices, the customer's invoice can be reduced by posting a:

a. Sales invoice

b. Customer receipt

c. Debit memo

d. Credit memo

23. On the statement of cash flows, the cashflows from operating activities section would include:

a. Receipts from the issuance of capital stock

b. Receipts from the sale of investments

c. Payments for the acquisition of investments

d. Net income

24.The Income Statement will include thefollowing accounts:

a. Revenues less Expenses (ordered largest to smallest amount)with Other Expenses listed last
b. Revenues less Expenses (ordered smallest to largest amounts.With Miscellaneous Expenses listed last

c. Revenues less Expenses (ordered in alphabetical order) withOther Expenses listed last

d. Revenues less Expenses (order is not important)

25. The Statement of Cash Flows answers all ofthe following except:

a. Where the receipts come from

b. Where the cash payments were used for

c. What the overall change in cash was

d. If there will be enough cash to pay the currentliabilities

26. On the Navigation Bar, make the followingselections to enter a sales invoice:

a. Customers & Sales Navigation Center, click on theCustomers icon and select View and Edit Customers

b. Customers & Sales Navigation Center, click on the SalesInvoices icon and select Set up Invoice Defaults

c. Tasks; Purchases/Receive Inventory

d. Customers & Sales Navigation Center, click on the SalesInvoices icon and select New Sales Invoice

27. The following would be included in theheading of an income statement:

a. Title of the statement

b. Name of the business

c. Period of time covered by the statement

d. All of the above

. 28. A departmentalized accounting systemprovides information that can be used to:

a. Custom design departmental statements

b. Evaluate profitability and cost effectiveness

c. Evaluate current assets

d. Modify PCA's standard forms

29. In Peachtree, information about a sale isrecorded in the:

a. Purchase window

b. Inventory window

c. Purchases/Receive Inventory window

d. Sales/Invoicing window

30. The sample company, Bellwether GardenSupply, uses which method of posting?

a. Batch posting

b. Real-time posting

c. Cash basis posting

d. Accrual basis posting

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ACCT 1220 Chapter Notes - Chapter 2: Current Liability, Deferral, Book Value

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