Accounting Concepts Quiz

A work sheet is

• used to plan adjustments and sort financial statement information.

• prepared only once a year.

• prepared to aid in the analysis of financial statements.

• not necessary for small businesses.

Preparing a work sheet at the end of each fiscal period is an application of the accounting concept

• Accounting Period Cycle.

• Adequate Disclosure.

• Matching Expenses with Revenue.

• Historical Cost.

The book value of accounts receivable

• is equal to the balance in the Accounts Receivable controlling account.

• reflects the amount the business expects to collect in the future.

• is calculated as Accounts Receivable less Uncollectible Accounts Expense.

• can be obtained from a single general ledger account.

The entry to journalize the adjustment for merchandise inventory when beginning Merchandise Inventory is $125,000.00 and ending Merchandise Inventory is $115,000.00 is

• debit Merchandise Inventory, $10,000.00; credit Income Summary, $10,000.00.

• debit Income Summary, $10,000.00; credit Merchandise Inventory, $10,000.00.

• debit Merchandise Inventory $115,000.00; credit Income Summary, $115,000.00.

• debit Income Summary, $115,000.00; credit Merchandise Inventory, $115,000.00.

Recording expenses in the fiscal period in which the expenses contribute to earning revenue is an application of the accounting concept

• Accounting Period Cycle.

• Adequate Disclosure.

• Matching Expenses with Revenue.

• Historical Cost.

Depreciation expense is calculated using all of the following amounts except

• fair market value.

• estimated salvage value.

• estimated useful life.

• original cost.

The total amount of depreciation expense that has been recorded since the purchase of a plant asset is called

• book value.

• accumulated depreciation.

• salvage value.

• net realizable value.

The adjustment for federal income tax includes

• an expense and a liability account.

• an expense account only.

• an expense account and a temporary equity account.

When a work sheet is completed, a net loss will appear in the

• Income Statement Debit and Balance Sheet Credit columns.

• Income Statement Credit and Balance Sheet Debit columns.

• Income Statement Debit and Income Statement Credit columns.

• Balance Sheet Debit and Balance Sheet Credit columns.