I ? Matching each of the following statements with its proper term.
1.Temporary account ()
2.Working papers ()
3.Fiscal year ()
4.Accrual accounting ()
5.Posting
6.General ledger ()
7.Liquidity ()
8.Withdrawals ()
9.CPA ()
10.Transaction ()
11.Accounting cycle ()
12.Closing entries ()
13.Reversing entry ()
14.Accounting equation()
15.Double entry accounting()
16.T account ()
17.Chart of accounts()
18.Account form ()
19.Business entity concept ()
20.Financial accounting ()
A.Assets taken from the business by the owner for personal use.
B.The annual accounting period adopted by a business.
C.Convertibility to cash
D.Assets=liabilities+ owner" s equity.
E.Documents that help accountants organize their work.
F.An condition or directly affects its results of accounting event or condition that directly changes an entity's financial operation.
G.The idea that revenues are recorded (recognized) when earned and that expenses are recorded when incurred.
H.The book that contains the individual account (or control account), grouped
according to the five elements of financial statements.
I.Transferring data from the journal to the ledger.
J.An expert accountant licensed by the state.
K.The entries that transfer the balances of the revenue, expense, and dividends accounts to the retained earnings account.
L.The opposite of an adjusting entry, journalized to facilitate routine bookkeeping entries.
M.The process that begins with analyzing and journalizing transactions and ends with the post-closing balance.
N.The simplest form of account.
O.Income statement accounts
P. A system of accounting for recording ?tr ansactions, based on recording
increases and decreases in accounts so that debits equals credits.
Q.A list of accounts in the ledger
R.The branch of accounting concerned with providing external users with
financial information needed to make decisions.
S.An concept of accounting that limits the economic data in the accounting
system to data related directly to the activities of the business.
T.The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and the liabilities and owner's equity sections on the right side.
II、Multiple choice questions
1.A profit-making business that is a separate legal entity and in which ownership is divided into shares of stock is known as a:()
A.proprietorship
B. partnership
C. service business
D. corporation
2.The resources owned by a business is called :()
A.assets
B. liabilities
C. the account equation
D. owner" s equity
3.A list of assets, liabilities, and owner's equity of a business entity as of a specific date is :()
A.a balance sheet
B.an income statement
C.a retained earning statement
D.a statement of cash flows
4.A debit may signify ()
A.an increase in an asset account
B.a decrease in an asset account
C.an increase in a liability account
D.an increase in a capital stock account
5.The type of account with a normal credit balance is ()
A. an asset
B. a revenue
C. a dividends
D. an expense
6.The receipt of cash from customers in payment of their accounts would be recorded by a ()
A.debit to Cash; credit to Accounts Receivable
B.debit to Accounts Receivable; credit to Cash
C.debit to Cash; credit to Accounts payable
D.debit to Accounts payable; credit to Cash
7.Which of the following accounts would be classified as a current asset on the balance sheet?()
A. office equipment
B. accumulated depreciation
C. land
D. accounts receivable
8.Which of the following accounts would not be closed to the income summary account at the end of a period?()
A. fees earned
B. rent expense
C. wages expense
D. accumulated depreciation
9.What is the maturity value of a 90-day, 12% note for $ 100007()
A. $8800
B. $10300
C.$10000
D.$ll200
10.Which of the following is an example of intangible asset?( )
A. patens
B. copyrights
C. goodwill
D. all of the above
Hie True-False
1. The income summary account can be found in the statement of owner's equity.()
2.Closing entries convert real and nominal accounts to zero balances.()
3.The worksheet is prepared after the formal adjusting entries have been made in the
journal.()
4. A calendar year refers to any twelve month period.()
5.The cash basis of accounting often violates the matching rule.()
6.Adjusting entries help make financial statements comparable from one period to
the next.()
7.Payment of accounts payable will be recorded in the purchase journal.()
8.In all journal entries, at least one account must be increased, and another
decreased.()
9.The presentation of the owner's equity section is same for three types of business
organization.().
10.For a given account, total debits must always equal total credits.()
11.Internal reporting (i.e., management accounting) must follow GAAP in all respects.()
12.Generally accepted accounting principles are not like laws of math and science; they are guidelines which define correct accounting practice at the time.( )
13.The various steps in the accounting cycle occur with equal frequency-( )
14.The credit side of an account implies something favorable.( )
15.Transactions are initially recorded in a ledger account.( )
16.The net income for a period in the income statement will increase the balance of owner's equity.( )
17.Failure to include a warehouse's merchandise in ending inventory results in an
overstated net income.( )
18.The statement of owner's equity links a company's income statement to its balance sheet.()
19.The existence of Accounts Receivable on the balance sheet indicates that the company has one or more creditors.()
20.Financial statements are the end products of the accounting process.()
IV. Integrated questions ( 50)
Simmons I nc. , whose account i ng year ends on June 30, had the fol lowing ba lances i n its I edger at June 30 of the current year (under a per iodic system):
Cash $3500
Accounts Receivable 11000
Inventory 20000
Prepa i d i nsurance 1200
Off i ce SuppIi es on Hand 500
Furniture and Fi xtures 7000
Accumulated depreciation- Furniture and Fixtures 1100
De Ii very Equ i pment 6000
Accumulated deprec i at i on- De Ii very Equ i pment 1800
Accounts PayabIe 8500
Notes payable 6500
Capital Stock 15000
Reta i ned Earn i ngs 10400
Sales 110000
Sa Ies Returns and a I Iowances 800
Sa Ies Di scounts 1900
710001000
Purchases
Purchases Returns and a I Iowances Purchases D i scounts 700 Transportat i on In 3000 Sa Ies Sa I ar i es Expense 9000 De I i very Expense 2000 Advert i s i ng Expense 3800 Rent Expense
3600 Off i ce Sa I ar ies Expense 10300 Utilities Expense
400
Dur i ng the year, the account i ng department prepared month Iy statements us i ng worksheets, but no adjust i ng entr i es were made i n the journa I s and ledgers. Data for the year-end adjustments are as fo I Iows: (1) Inventory, June 30
$16800
(2) Prepa i d i nsurance, June 30 400 (3) Off i ce SuppI i es on Hand 320 (4) Depreciation Expense for year, Furniture
andFixtures
700 (5) Deprec i at i on Expense for year, De I i veryEqu i pment 900 (6) Accrued Sa Ies Sa I ar i es, June 30
300 (7) Accrued Off i ce Sa I ar i es, June
30
200
Requ i red:
(a) Prepare a Ba Iance Sheet.
(b) Make the closing entr i es i n a genera I journaI.
V eTranslation (15)
(a) To meet the needs of the externa I users, a framework of account i ng standards, principles and procedures known as "general accepted account i ng principle" have been developed to i nsure the re Ievance and reliability of the account i ng i nformat i on conta i ned i n these externa I f i nanc i a I reports. (P3 )
(b)Once the appropr i ate adjust i ng entr i es have been made and posted to the I edger accounts, an i ncome statement and a balance sheet may be prepared d i red Iy from the account ba lances. (P73)
(c)The genera I journaI i s a relatively simple record i n wh i ch any type of bus i ness transact i on can be recorded. I n contrast to the genera I journaI, a spec i a I journaI i s des i gned to record a spec i f i c type of frequently occurr i ng bus i ness transact i on. (P44)
(d)One of the most important funct ions of account i ng i s to accumulate and
report f i nanc i a I i nformat i on that shows an organ i zat i on's f i nanc i a I position and the results of its operat i ons to its i nterested users. (P3)
(e)There are three basic financial statements which are the end products of f i nanc i a I account i ng: Ba Iance Sheet, Income Statement and the Statement of Cash Flows. (P11)
(f)The p I an of organ i zat i on and a I I of the coord i nate methods and measures adopted within a busi ness to safeguard its assets, check accuracy and rel iabi I i ty of its account i ng data, promote operat i ona I eff i c i ency and encourage adherence to prescr i bed manager ia I policies. (P92)