Accounting Final Exam

The chart of accounts should be the same for each business.

Owner's equity will be reduced by all of the following except

The drawing account is debited in the closing entry.

WAC stands for Weighted Average Cost.

The entry to record the return of merchandise from a customer would include a

Sales to customers who use credit cards are generally treated as Accounts Receivable Sales.

The initials GAAP stand for

If the perpetual inventory system is used, the merchandise inventory account is debited for purchases of merchandise.

FIFO is like a barrel.

What is the term applied to the excess of revenue from sales over the Cost of Merchandise Sold?

Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets.

Which of the following is a manufacturing business?

Which of the following accounts has a normal credit balance?

Prior to the adjusting process, accrued revenue has

LIFO is like a gumball machine

Straight-line depreciation calculates the most depreciation in year one.

Prior to the adjusting process, accrued expenses have

Service businesses provide services for income, while a merchandising business sells merchandise.

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

The role of accounting is to provide many different users with financial information to make economic decisions.

A chart of accounts is a listing of accounts that make up the journal.

In a perpetual inventory system, the merchandise inventory account is only used to reflect the beginning inventory.

The matching principle requires expenses be recorded in the same period that the related revenue is recorded.

Generally accepted accounting principles require the accrual basis of accounting.

Most companies will not take a purchase discount, because 1% or 2% discounts are insignificant.

Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.

LIFO stands for Last In First Out.

A merchandising business buys products from other businesses to sell to customers.

Cost of goods sold is a revenue account.

In credit terms of 3/15, n/45, the "3" represents the

Which of the following types of accounts have a normal credit balance?

Many countries outside the United States use financial accounting standards issued by the

Net income is closed to the owner's capital account.

The formula for depreciable cost is

Gross profit is equal to

The trial balance prepared after all the closing entries have been posted is called a pre-closing trial balance.

Consuming goods and services in the process of generating revenues results in expenses.

If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

Merchandise inventory is classified on the balance sheet as a

Which of the following is not considered to be a liability?

Managerial accounting information is used by external and internal users equally.

All property, plant, and equipment assets are depreciated over time.

Proper ethical conduct implies that you only consider what's in your best interest.

The accumulated depreciation account is closed to the drawing account.

Which of the following accounts has a normal debit balance?

In retail businesses, inventory is reported as a current asset.

Senior executives cannot be criminally prosecuted for the wrongdoings they commit on behalf of their companies.

Under the _____ inventory method, accounting records maintain a continuously updated inventory value.

All of the following are documents used for inventory control except a

The normal balance of the accumulated depreciation account is a debit.

Cost of Merchandise Sold is the amount that the merchandising company pays for the merchandise it intends to sell.

Accounts payable are accounts that you expect will be paid to you.

Freight is considered a cost of inventory under FOB shipping point.