Mors 200 Arts Final - Accounting Compend- Multiple Choice Part 1
Income from the sale of funeral services appears on the Profit and Loss Statement, which reports the company’s earnings and expenses, helping assess profitability.
Basic accounting theory is based on:
A. single entry
B. double entry
C. triple entry
D. a double book
double entry
Key Terms
Basic accounting theory is based on:
A. single entry
B. double entry
C. triple entry
D. a double book
double entry
The group of accounts which you debit when increased are:
A. assets and capital
B. assets and income
C. assets and expenses
D. assets and liabilities
assets and expenses
The group of accounts which you credit to increase are:
A. liabilities and capital
B. liabilities and expenses
C. liabilities and assets
D. assets and expenses
liabilities and capital
When a funeral director buys a casket coach on credit, he would:
A. debit cash and credit casket coach
B. debit casket coach and credit accounts payable
C. debit casket coach and credit cash
D. credit casket coach and debit accounts payable
debit casket coach and credit accounts payable
The payment of rent by cash is recorded:
A. debit cash and credit capital
B. debit accounts payable and credit cash
C. debit rent expense and credit cash
D. debit cash and credit rent expense
debit rent expense and credit cash
Purchase of office supplies on credit is recorded by:
A. debit office supplies and debit credit purchases
B. debit purchases and credit accounts payable
C. debit office supplies and credit accounts payable
D. credit office supplies and debit accounts payable
Debit office supplies and credit accounts payable
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| Term | Definition |
|---|---|
Basic accounting theory is based on: A. single entry B. double entry C. triple entry D. a double book | double entry |
The group of accounts which you debit when increased are: A. assets and capital B. assets and income C. assets and expenses D. assets and liabilities | assets and expenses |
The group of accounts which you credit to increase are: A. liabilities and capital B. liabilities and expenses C. liabilities and assets D. assets and expenses | liabilities and capital |
When a funeral director buys a casket coach on credit, he would: A. debit cash and credit casket coach B. debit casket coach and credit accounts payable C. debit casket coach and credit cash D. credit casket coach and debit accounts payable | debit casket coach and credit accounts payable |
The payment of rent by cash is recorded: A. debit cash and credit capital B. debit accounts payable and credit cash C. debit rent expense and credit cash D. debit cash and credit rent expense | debit rent expense and credit cash |
Purchase of office supplies on credit is recorded by: A. debit office supplies and debit credit purchases B. debit purchases and credit accounts payable C. debit office supplies and credit accounts payable D. credit office supplies and debit accounts payable | Debit office supplies and credit accounts payable |
A ledger is a book of: A. original entry B. accounts C. accounting statements D. trial balances | accounts |
An entry on the debit side of a liability account indicates the account has been: A. increased B. decreased C. footed D. balanced | decreased |
An entry made on the debit side of the proprietorship account indicates that the account has been: A. increased B. decreased C. footed D. balanced | decreased |
An entry made on the debit side of an expense account indicates that the account has been: A. increased B. decreased C. footed D. balanced | increased |
The beginning balance in the supplies account is $600. During the month an additional $800 worth of supplies were purchased. At the end of the month, an inventory of the supplies found that only $300 remained on hand. What would be the amount of the adjusting entry for the supplies account? | $1,100.00 |
An entry made on the debit side of an asset account indicates that the account has been: A. increased B. decreased C. footed D. balanced | increased |
The things of value owned by a business are: A. assets B. capital C. revenue D. liabilities | assets |
An accounting year ending on some date other than December 31st is called: A. current year B. calendar year C. fiscal year D. physical year | fiscal year |
A person to whom a debt is owed is called a: A. debtor B. creditor C. debt D. credit | creditor |
A plant asset was purchased by the funeral home costing $8,000. It has a useful life of 3 years and a salvage value of $2,000. Using the straight line method of depreciation, what would be the yearly amount of depreciation? | $2,000 |
Which of these does not appear on the Balance Sheet? A. Assets B. Liabilities C. Expenses D. Proprietorship | Expenses |
Liabilities are all things a funeral home: A. owes B. owns C. spends D. sells | owes |
A Profit and Loss Statement can be prepared: A. only once a month B. only once every three months C. only once every 6 months D. at any time | at any time |
An entry on the credit side of an account indicates the account has been: A. increased B. decreased C. footed D. balanced | increased |
When cash is spent in the acquisition of an asset the net worth of a business is: A. increased B. decreased C. footed D. not affected | not affected |
The process of recording information in the ledger is called: A. journalizing B. balancing C. posting D. footing | posting |
Accounts Receivable is a/an: A. asset account B. liability account C. capital account D. revenue account | asset account |
Another term for Profit and Loss Statement is: A. Balance Sheet B. Income Statement C. Statement of Financial Condition D. Trial Balance | Income Statement |
The amount of revenue from the sale of funeral services would be shown on the: A. Balance Sheet B. Profit and Loss Statement C. Statement of Financial Condition D. Statement of Assets and LIabilites | Profit and Loss Statement |
The right side of a standard account is called the: A. profit side B. debit side C. credit side D. loss side | credit side |
The totaling of a column in a journal or ledger account is called: A. journalizing B. footing C. posting D. closing | footing |
Advertising expense would be reflected on the: A. Balance Sheet B. Statement of Owner's Equity C. Income Statement D. Statement of Financial Condition | Income Statement |
The accounts payable would be shown on the: A. Profit and Loss Statement B. Balance Sheet C. Accounts Receivable Ledger D. Income Statement | Balance Sheet |
A group pf accounts constitutes as a/an: A. ledger B. journal C. posting D. special journal | ledger |
If the total operating expenses section of the income statement is smaller than the total of the income section, the difference is: A. net worth B. net loss C. gross profit D. net profit | net profit |
Expense means a/an: A. increase in owner's equity B. decrease in owner's equity C. increase in an asset D. increase in sales | decrease in owner's equity |
Which of the following accounts would be used to assist the accountant in an adjusting entry involving depreciation: A. Automobile B. Automobile Expense C. Accumulated Depreciation D. Allowance for doubtful accounts | Accumulated Depreciation |
The difference between the two sides of the account is called the: A. account number B. account balance C. account schedule D. net profit | account balance |
The title of an account which would normally have a credit balance is: A. cash B. accounts receivable C. advertising expense D. accounts payable | accounts payable |
An increase in proprietorship as the result of a business transaction is a/an: A. asset B. liability C. net worth D. income | Income |
A list of accounts that shows the arrangement of the accounts in the ledger is called: A. Trial Balance B. Balance Sheet C. Chart of Accounts D. Accounts Receivable Ledger | Chart of Accounts |
Double entry book keeping means an entry was made: A. in a double book B. in a journal and ledger C. as an asset and a liability D. as a debit and credit | as a debit and credit |
The proprietorship of a business may be increased by: A. net income and borrowing from banks B. net income and investment of assets in the business by the owner C. collection of accounts receivable and borrowing from banks D. borrowing from the banks and purchases of assets on credit. | net income and investment of assets in the business by the owner |
The proprietorship of a business may be decreased by: A. net income and borrowing from banks B. net income and investment of assets in the business by the owner C. collection of accounts receivable and borrowing from banks D. expenses and withdrawals of assets from the business by the owner. | expenses and withdrawals of assets from the business by the owner. |
To establish a petty cash fund, one would: A. debit cash and credit petty cash B. debit accounts payable and credit cash C. debit petty cash and credit cash D. debit cash and credit accounts payable | debit petty cash and credit cash |
The abbreviation for "debit" is: A. Db. B. Dr. C. Dt. D. Dbt. | Dr. |
The abbreviation for "credit" is: A. Cd. B. Ct. C. Cr. D. Cred. | Cr. |
A person who signs a check or draft ordering payment to be made is called the: A. drawee B. drawer C. payee D. maker | drawer |
A person or concern, usually a bank, that has been ordered to make a payment on a check or draft is called the: A. drawee B. drawer C. payee D. maker | drawee |
A person or company who will receive payment on a promissory note, check, or draft or money order is called the: A. drawee B. drawer C. payee D. maker | payee |
FICA refers to: A. federal income tax B. state income tax C. city tax D. social security | social security |
Property of a relatively permanent nature used in the operation of a business and not intended for resale is called: A. current asset B. fixed asset C. current liability D. fixed liability | fixed asset |
Debts that are not due and payable within a year are called: A. current assets B. fixed assets C. current liabilities D. fixed liabilities | fixed liabilities |
The difference between cost of goods sold and their selling price is called: A. net profit B. gross profit C. ending inventory D. cost of goods available for sale | gross profit |
The excess of current assets over current liabilities is called: A. working capital B. total capital C. net worth D. overhead | working capital |
A written promise of the customer to pay the business a sum of money at a future date is called a/an: A. note payable B. note receivable C. accounts payable D. accounts receivable | note receivable |
Which of these does not qualify as a current asset? A. Cash B. Accounts receivable C. Office Supplies D. Land | Land |
A synonym for fair wear and tear of a durable asset is: A. obsolescence B. antiquated C. depreciation D. redundant | depreciation |
A language of business employed to communicate financial information based upon the recording, classification, summarization, and interpretation of financial data is called: A. accounting B. budgeting C. management D. merchandising | Accounting |
Assets= Liabilities + Owner's Equity is the: A. formula for determining net worth B. accounting equation C. formula for GAAP D. expanded accounting equation | accounting equation |
The increase in net worth due to the excess of income over costs and expenses is called: A. principal B. loss C. profit D. overhead | profit |
Money paid for the use of money is called: A. interest B. bad debts C. principal D. petty cash | interest |
The difference between net sales and cost of goods sold: A. principal B. interest C. sales tax D. gross margin | gross margin |
Goods purchased for resale at a profit: A. supplies B. capital C. fixed assets D. merchandise | merchandise |
A disbursement is a: A. budget B. payment C. receipt D. footing | payment |
What would be the closing entry to close the revenue account? A. Debit expense and revenue summary, credit revenue B. Debit revenue, credit expenses C. Debit revenue, credit expense and revenue summary D. Debit capital, credit revenue | Debit revenue, credit expenses and revenue summary |
Income received, but not yet earned is: A. a bad debt B. net profit C. deferred income D. interest | deferred income |
A paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/an: A. invoice B. ledger C. journal D. deposit slip | invoice |
One who has made a sale is called a/an: A. consignor B. maker C. payee D. vendor | vendor |
A estimate of revenue and probable expense for a given period of time is a: A. balance sheet B. bank statement C. budget D. bill | budget |
The person or business concern to whom a shipment is made is a: A. vendee B. consignee C. payee D. drawee | consignee |
A distribution of profits of a corporation to its stockholders as declared by the board of director is: A. gross earnings B. interest C. investment D. dividend | dividend |
The person who orders the bank to make payment of a financial instrument is properly termed a/an: A. payee B. drawee C. drawer D. endorser | drawer |
The sole owner of a business is a: A. maker B. drawer C. proprietor D. partner | proprietor |
A fund of currency and coin establishment for the payment of small amounts of money is: A. accounts payable B. petty cash C. fixed assets D. drawing account | petty cash |
The difference between total sales and sales returns and allowances is: A. net profit B. net sales C. net worth D. net loss | net sales |
The amount added to the cost of an article to determine the selling price of that article is the: A. mark-up B. other income C. net profit D. interest | Mark-up |
A total, written in small pencil figures, under the last entry in a column is the: A. assets B. balance C. journalizing D. footing | footing |
A double line under the last entry on a T-account means: A. the entry is complete B. there is more to do on the entry C. do not post this entry D. the entry is correct | the entry is complete |
Increases in the owner's equity resulting from business operation is known as: A. interest B. principle C. overhead D. income | income |
That portion of a plant assets original cost that cannot be depreciated is called: A. mark-up B. cost C. scrap value D. take home pay | scrap value |
A decrease in net worth due to excess of costs and expenses over income is: A. proprietorship B. retained earnings C. take home pay D. loss | loss |
The merchandise that a business keeps on hand for sale is the: A. inventory B. fixed assets C. overhead D. supplies | inventory |
Which of the following represents the difference between the total assets and total liabilities? Owner's Equity Net Worth Net Income Capital A. 1 only B. 1 & 2 only C. 1,2,&4 only D. 1,3,&4 only | 1,2,& 4 only |
The holder or person owning stock in a corporation is the: A. accountant B. maker C. stockholder D. director | stockholder |
At the end of the month, a funeral home's assets totaled $50,000; the liabilities totaled $20,000; revenue for the month totaled $6,000; and the total of the expenses amounted to $4,000. Which of the following statements are true? owner's equity= $70,000 owner's equity = $30,000 net income = $2,000 net loss = A. 1 & 2 B. 2 & 3 C. 1 & 4 D. 2 & 4 | 2 & 3 |
The basic accounting theory is based on: A. single entry B. double entry C. triple entry D. both a & b | double entry |
The acronym REID is used when: A. closing temporary accounts B. making adjustments to the ledger C. correcting journal entries D. posting journal entries to the ledger | closing temporary accounts |
The period of time required to purchase goods and services and turn them back into cash is called: A. the accounting cycle B. a fiscal year C. the normal operating cycle D. a calendar year | the normal operating cycle |
A ledger is a book of: A. accounting statements B. trial balance C. original entry D. accounts | accounts |
An entry on the debit side of the owner's equity indicates that the account has been: A. increased B. decreased C. neither D. both | decreased |
An entry on the credit side of an expense account indicates the account has been: A. adjusted B. closed C. increased D. balanced | closed |
The book of original entry is in: A. alpha-numeric order B. chronological order C. numeric order D. highest to lowest order | chronological order |
The debts one owes are: A. assets B. liabilities C. income D. expenses | liabilities |
The things one owns are: A. capital accounts B. assets C. liabilities D. revenues | assets |
Sales minus cost of goods sold equals: A. net profit B. gross profit C. overhead D. operation expenses | gross profit |
The amount of depreciation taken during the current fiscal year is properly termed: A. accumulated depreciation B. depreciation expense C. current depreciation D. cumulative depreciation | depreciation expense |
The decrease in the value of a fixed asset is called: A. a discount B. an obsolescence C. depreciation D. credit | depreciation |
The process of recording information in the ledger is called: A. journalizing B. balancing C. posting D. editing | posting |
The primary purpose of a business is: A. sales B. service C. prestige D. profit | profit |
The only time the debit side of the revenue account is used is when you make: A. adjusting entries B. posting entries C. journalizing entries D. closing entries | closing entries |
When cash is spent in the acquisition of an asset the impact on the accounting equation is: A. the asset cash is debited B. the asset cash is credited C. the new asset is credited D. owner's equity is debited | the asset cash is credited |
An entry on the credit side of a liability account indicates that the account has been: A. increased B. decreased C. balanced D. audited | increased |
Accounts payable is a/an: A. asset account B. liability account C. owner's equity account D. expense account | liability account |