ADMS 2500 Study Guide - Subledger, Cash Flow Statement, Accrual

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violeteel391

29 Mar 2014

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York University

Department

Administrative Studies

Course

ADMS 2500

Professor

all

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ADMS 2500 Full Course Notes

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Loss owner"s equity goes down and if cash then cash if goods then from the prepaid advertising whatever expense it is. Slide 88 we will charge 1/3 of the expense. Focus on investors and creditors, predicting future cash flows. Computer do only post, trial balance, trial balance and financial statements over accounting cycle it could be monthly , yearly. Trial balance: total number of debits should equal trial balance. T accounts: assets and expenses increases and decreases rest apart from that all decreases and increases in t- account. Within one account cash , there are fixed accounts for cash. For example 1. 1 , 1. 2 , 1. 3 , 1. 4 , Total of subsidiary ledger should equal to control account. Accrual: advance from cash flow, whenever you want to recognize revenue or expense. Deferrals: when you get the money now or spend the money now but the revenue or expense would be recognized in the future period.

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QUESTION 21 A journal entry for a $75 payment for Rent expensewas posted as a debit to Salary expense and a credit to Cash. Thiserror will cause which of the following conditions on the trialbalance? A. The sum of the credits will equal the sum of thedebits. B. The sum of the debits will exceed the sum of the creditsby $75. C. The sum of the credits will exceed the sum of the debitsby $150. D. The sum of the debits will exceed the sum of thecredits by $150.

QUESTION 22 The business receives cash from a customer that isowed to the company "on account," based on services rendered to thecustomer previously. How does the collection of the cash affect theaccounting equation? A. Assets increase; owner's equity increases.B. Assets increase; liabilities increase. C. Assets decrease;owner's equity decreases. D. One asset increases; one assetdecreases

QUESTION 23 A business completes service to a client and sendsout a sales invoice. The amount will be collected from the customerat a later time. Which of the following would be TRUE at the timewhen the invoice is sent out? A. Total assets will decrease. B. Netincome will increase. C. Owner's equity will decrease. D. Totalliabilities will increase.

QUESTION 24 Which of the following accounts increases with adebit? A. Cash B. Interest Payable C. Accounts Payable D. Smith,Capital

QUESTION 25 The Accounts Receivable account of Nuptials Inc. isshown below. Accounts Receivable Dr Cr 26,000 3,500 5,000 Calculatethe ending balance of the account. A. $33,500 debit B. $31,000,debit C. $3,500, credit D. $27,500, debit

QUESTION 26 The following transactions for the month of Marchhave been journalized and posted to the proper accounts. Mar. 1Martinez invested $9,000 cash in his new design services business.Mar. 2 Paid the first month's rent of $800. Mar. 3 Purchasedequipment by paying $3,000 cash and executing a note payable for$5,000. Mar. 4 Purchased office supplies for $750 cash. Mar. 5Billed a client for $10,000 of design services completed. Mar. 6Received $8,000 on account for the services previously recorded.What is the balance in Cash? A. $13,250 B. $12,450 C. $15,450 D.$14,000

QUESTION 27 Which of the following sequences states the order inwhich a trial balance lists accounts? A. Equity â Assets âLiabilities B. Liabilities â Assets â Equity C. Assets â Equity âLiabilities D. Assets â Liabilities â Equity

QUESTION 28 Which of the following statements is FALSE? A. Atrial balance shows total amounts for assets, liabilities, andequity. B. A trial balance is created before the balance sheet isprepared. C. A trial balance presents data in debit and creditformat, but a balance sheet does not. D. A trial balance showstotal debits and total credits.

QUESTION 29 A promise received from a business's customers topay for goods and services that they received from the business iscalled a(n): A. revenue. B. account receivable. C. account payable.D. expense.

QUESTION 30 You can evaluate the economic resources, debt, andoverall financial position of a company in which of the followingfinancial statements? A. Income statement B. Balance sheet C.Statement of owner's equity D. Statement of cash flows

QUESTION 31 A book holding all of the accounts is called the: A.income statement. B. journal. C. ledger. D. balance sheet.

QUESTION 32 Which of the following groups of accounts BOTHnormally have a debit balance? A. Assets and Liabilities B.Liabilities and Owner's equity C. Revenues and Expenses D. Assetsand Expenses

QUESTION 33 A business buys $500 of supplies on account. Whichaccount is debited? A. Supplies B. Cash C. Service revenue D.Accounts payable

Question 11 pts

Which of the following terms describe the types of adjusting entries?

expenses and revenues

prepaid expenses and prepaid revenues

deferrals and accruals

deferrals and depreciation

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Question 21 pts

Unearned Revenue is always

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Question 31 pts

The adjusted trial balance shows

assets, liabilities, and common stock only

revenues and expenses only

amounts that may be out of balance

amounts that are ready for the financial statements

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Question 41 pts

Which of the following accounts is not closed?

Salaries Expense

Dividends

Accumulated Depreciation, Equipment

Service Revenue

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Question 51 pts

Given the following adjusted trial balance:

	Debit	Credit
Cash	$1,562
Accounts receivable	2,098
Inventory	3,124
Prepaid rent	86
Equipment	300
Accumulated depreciation-equipment		52
Accounts payable		82
Unearned service revenue		122
Common stock		206
Retained earnings		6,610
Service revenue		268
Interest revenue		56
Salaries and wages expense	160
Travel expense	66
Total	$7,396	$7,396

Net income for the year is

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Question 61 pts

Wolf Pack Services receives $10,000 cash in advance of services performed and credits a liability account. Which of the following adjusting entries will need to be made after the services are performed?

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Cash		10,000

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Service Revenue		10,000

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Prepaid Expense		10,000

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Accounts Receivable		10,000

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Question 71 pts

Accumulated Depreciation is a(n)

liability account

stockholderâs equity account

contra asset account

asset account

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Question 81 pts

Kimmel Companyâs accountant makes the following entry to record $2,000 of depreciation expense on the companyâs equipment on December 31, 2013:

	Dr.	Cr.
Depreciation Expense	2,000
Cash		2,000

The effect of this entry is to

adjust the accounts to their proper amounts on December 31, 2013

understate total assets on the balance sheet as of December 31, 2013

overstate the book value of the depreciable assets at December 31, 2013

understate the book value of the depreciable assets as of December 31, 2013

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Question 91 pts

The weekly payrool of Wolverine Corporation is $3,000. Employees work five days per week, Monday through Friday. December 31, 2013, the end of the fiscal year, is a Tuesday. Wolverine Corporation will not pay its employees for the full week until Friday, its normal payday. Wolverine Corporation will make which of the following adjusting entries on Tuesday, December 31?

Accounts	Debit	Credit
Salaries Payable	1,200

Accounts	Debit	Credit
Salaries Expenses	1,200
Accumulated Salaries		1,200

Accounts	Debit	Credit
Salaries Expense	1,200
Cash		1,200

Accounts	Debit	Credit
Salaries Expense	1,200
Salaries Payable		1,200

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Question 101 pts

Which of the following statements regarding closing entries is true?

Closing entries bring the Retained Earnings account to its correct ending balance.

Closing entries transfer unearned revenues, expenses, and dividends to retained earnings.

Closing entries zero out the assets, expenses, and dividends accounts to prepare them for the next accounting period.

All of these statements are true.

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13.
value:
4 points

What would be the appropriate entry for the followingtransaction?
Bill Co. performed $5,200 in consulting services on account

1.Credit to Cash, Debit to Accounts Receivable

2.Debit to Revenue, Debit to Cash

3.Debit to Accounts Receivable, Credit to Cash

4.Debit to Revenue, Credit to Cash

5.Debit to Accounts Receivable, Credit to Revenue

14.
value:
4 points

Which of the following is the appropriate journal entry if acompany performs a service and then bills the customer?

1.Debit to Cash, Debit to Revenue

2.Debit to Cash, Credit to Revenue

3.Debit to Accounts Receivable, Credit to Cash

4.Debit to Revenue, Credit to Accounts Receivable

5.Debit to Accounts Receivable, Credit to Revenue

15.
value:
4 points

Of the following accounts, the one that normally has a creditbalance is:

1.Cash

2.Office Equipment

3.Sales Salaries Payable

4.Dividends

5.Sales Salaries Expense

16.
value:
4 points

For what reason do most sellers require customers to have theirreceipts in order to exchange or return purchased items?

The receipt contains coded information which the seller needs toprepare and analyze the trial balance.

Sellers wish to ensure that the sale in question was rung up on theregister in the first place.

This is a legal requirement mandated by a federal law.

The receipt is serving as a promissory note.

To create an environment in which customer's do not want to returnitems.

17.
value:
4 points

A ledger is:

A record containing increases and decreases in a specific asset,liability, equity, revenue or expense item

A journal in which transactions are first recorded

A collection of documents that describe transactions and eventsduring the accounting process

A list of all accounts with their debit balances at a point intime

A list of all accounts a company uses and includes anidentification number assigned to each account

18.
value:
4 points

Stride Rite has total assets of $425 million. Its total liabilitiesare $110 million. Its equity is $315 million. Calculate the debtratio.

38.6%

13.4%

34.9%

25.9%

14.9%

19.
value:
4 points

The accounting process begins with:

Analysis of business transactions and events

Preparation of financial statements and other reports

Summarizing the recorded effects of business transactions

Presentation of financial information to decision-makers

Preparation of the trial balance

20.
value:
4 points

Which of the following statements is correct?

When a future expense is paid in advance, the payment is normallyrecorded in a liability account called Prepaid Expense

Promises of future payment are called accounts payable

Increases and decreases in cash are always recorded in the retainedearnings account

An account called Land is commonly used to record increases anddecreases in both the land and buildings owned by a business

Accrued liabilities include accounts receivable

21.
value:
4 points

The adjusted trial balance contains information pertainingto:

Asset accounts only

Balance sheet accounts only

Income statement accounts only

All general ledger accounts

Revenue accounts only

22.
value:
4 points

A classified balance sheet:

Measures a company's ability to pay its bills on time

Organizes assets and liabilities into important subgroups

Presents revenues, expenses and net income

Reports operating, investing and financing activities

Reports the effect of profit and dividends on retainedearnings

23.
value:
4 points

If accrued salaries were recorded on December 31 with a credit toSalaries Payable, the entry to record payment of these wages on thefollowing January 5 would include:

A debit to Cash and a credit to Salaries Payable

A debit to Cash and a credit to Prepaid Salaries

A debit to Salaries Payable and a credit to Cash

A debit to Salaries Payable and a credit to Salaries Expense

No entry would be necessary on January 5

24.
value:
4 points

If a company records prepayment of expenses in an asset account,the adjusting entry would:

Result in a debit to an expense and a credit to an assetaccount

Cause an adjustment to prior expense to be overstated and assets tobe understated

Cause an accrued liability account to exist

Result in a debit to a liability and a credit to an assetaccount

Decrease cash

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ADMS 2500 Study Guide - Subledger, Cash Flow Statement, Accrual

ADMS 2500 Full Course Notes

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