Accounting Midterm Practice

Question 1

An owner put $75,000 down on a $600,000 loan. What was recorded as liability & equity?

Accepted Answer

Liability = $525,000, Equity = $75,000

Question 2

The accounts payable account is classified as an -

Accepted Answer

liability

Question 3

_____ represents the cost of product used in the selling process.

Accepted Answer

Cost of Sales

Question 4

In a proprietorship, the business owner can be legally paid a salary or wage from the business.

Accepted Answer

False

Question 5

Expenses that are incurred regardless of sales volume are Operating Expenses.

Accepted Answer

False

Question 6

China, glassware, silver, linen, and uniforms are reported on the balance sheet under -

Accepted Answer

property and equipment.

Question 7

When opening a new restaurant prepare a _______ to determine the likelihood of success.

Accepted Answer

feasibility study

Question 8

Which of the following statements about a corporation is true?

Accepted Answer

All of the above.

Question 9

The accounting practice of spreading the cost of an asset over the term of its useful life -

Accepted Answer

depreciation.

Question 10

The fundamental purpose of accounting is to -

Accepted Answer

provide accurate, useful, and timely financial information.

Question 11

The term used for cash and other assets that can be converted into cash within 12 month.

Accepted Answer

Current Assets

Question 12

The balance sheet shows -

Accepted Answer

assets, liabilities, and equity.

Question 13

A _____ is a business year and can be any 12 consecutive months.

Accepted Answer

Fiscal year

Question 14

A guest books a banquet to be held six months fro today and the guest pays in full $9,000.

Accepted Answer

Sales will be recorded when the event happens.

Question 15

Which best defines a hybrid liability, as it relates to a hospitality operation's balance sheet

Accepted Answer

liabilities that are part current and part long-term.

Question 16

The fundamental accounting equation is -

Accepted Answer

assets = liabilities + equity

Question 17

Financial document that provides info about the results of a company's ops for a period of time

Accepted Answer

statement of income

Question 18

Capital stock is a term that represents all classes of stock.

Accepted Answer

True

Question 19

Current assets consist of -

Accepted Answer

All of the above.

Question 20

In a periodic inventory system, inventory ins and outs are monitored with checkpoints.

Accepted Answer

False

Question 21

The term used for money owed to a business by its customers.

Accepted Answer

Accounts receivable.

Question 22

The purpose of a balance sheet it to -

Accepted Answer

show the financial position of a company on a given date.

Question 23

Why is it important that you, a hospitality student or professional, study accounting?

Accepted Answer

You need to know how info is processed and reports prepared.

Question 24

The bookkeeping accounts kept by a business are referred to collectively as the -

Accepted Answer

general ledger

Question 25

What is term used to describe the result of subtracting "cost of sales" from "net revenue".

Accepted Answer

Gross Profit

Question 26

Prepaid rent expense is classified as an -

Accepted Answer

asset

Question 27

The account prepaid Insurance is classified on the balance sheet as a long-term liability.

Accepted Answer

False

Question 28

The owner's financial interest in the business is called -

Accepted Answer

equity.

Question 29

A ___ is an agreement granting the use of the name, trademark, and products.

Accepted Answer

Franchise

Question 30

The amount paid by stockholders in excess of the par value is called additional paid-in capital

Accepted Answer

True

Accounting Midterm Practice

Questions 30

Accounting Midterm Practice

Questions 30