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ACC 201 Study Guide - Quiz Guide: Standard Accounting Practice, General Ledger, Cash Flow Statement

162 views5 pages
sangriagnat800
9 Feb 2017
School
Ball State University
Department
Accounting
Course
ACC 201
Professor
Arnott

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Document Summary

Accounting equation: assets = liabilities + equity. Trial balance: is a list of accounts and their balances at a point in time. Chart of accounts: is a list of all ledger accounts and includes an identification number assigned to each account. General journal: the process of journalizing transactions requires an understanding of a journal. While companies can use various journals, every company. General ledger: is a record containing all accounts used by a company. Account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. Posted/posting: process of transferring journal entry information to the ledger. Analyzing and recording process: source documents, record in journal entry, post information in ledger, start trail balance. T account: represents a ledger account and is a tool used to understand the effects of one or more transactions. Debits on left and credit on right.

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Related Questions

In one (1) page or less, choose 5 financial accounting topicsthat we’ve covered this semester and relate them to yourpersonal life or the real world(outside of accounting, or course). I have provided a listbelow to give you some ideas, but please feel free to think outsidethe box.

Income Statement

Balance Sheet

Statement of Cash Flows

Bank Reconciliation

Liabilities

Bonds

Notes

Assets

Equity

Chart of Accounts

Debits and Credits

Lower of Cost or Market

Bookkeeping

Payroll

Taxes

Inventory and Cost of Goods Sold

Depreciation

Accumulated Depreciation

Adjusting Entries

Journal Entries

General Ledger

Closing Entries

Receivables

Bad Debt Expense

Interest

Prepaid Expenses

Unearned Revenue

Sales

Sales Returns and Allowances

Sales Discounts

Inventory Valuation

FIFO – First in, First out

LIFO – Last in , First out

Specific Identification

Weighted Average

Sole Proprietorship

Corporation

Conservatism

Creditors

Equipment

T-Accounts

Net Income

Trial Balance

Temporary Accounts

Permanent Accounts

Audit report

Ratios

Debt-to-assets

Asset Turnover

Net Profit Margin

Sarbanes-Oxley Act

IFRS

Segregation of duties

Unqualified Opinion

1. Produce a balance sheet for a company that distinguishesbetween current and non-current assets and liabilities.
2. Create a balance sheet from a trial balance.
3. Create a comparison of net income based on different methods ofinventory accounting.
4. Analyze a statement of cash flows and show where each line itemcan be found or calculated from the other financialstatements.
5. Prepare a full analysis of key financial ratios for a companyand state conclusions about the financial strength of the companycompared to industry ratios.

Create a BalanceSheet from the trial balance:
Debits Credits Classification
Cash 300,000.00 Current asset
Sales (10,000,000.00) Income statement
Cost of Goods Sold 7,000,000.00 Income statement
Selling Expenses 500,000.00 Income statement
Other income (50,000.00) Income statement
Administrative expenses 350,000.00 Income statement
Interest Expenses 12,500.00 Income statement
Land 300,000.00 non-current asset
Building 2,000,000.00 non-current asset
Long Term bond payable (550,000.00) non-current liability
Accrued Liabilities (50,000.00) current- liability
Accumulated Depreciation Buildings (250,000.00) non-current asset
Equipment 750,000.00 non-current asset
Receivables 100,000.00 current asset
Allowance for doubtful accounts (7,500.00) current asset
Accumulated depreciation equipment (125,000.00) non-current asset
Common Stock (200,000.00) equity
Payables (115,000.00) current Liability
Inventories 200,000.00 current asset
Prepaid Expenses 50,000.00 current asset
Retained Earnings (215,000.00) equity
11,562,500.00 (11,562,500.00)
Assets Equity and Liabilities
Current Assets Current Liabilities
Total Current Assets - Total Current Liabilities -
Total long term Liabilities -
Total property plant and equipment -
Total Equity -
Total Assets - Total Equity and liabilities -
QUESTION 1

Accounting is an information and measurement system thatidentifies, records, and communicates relevant, reliable, andcomparable information about an organization's businessactivities.
True
False

QUESTION 2

We use the accounting equation to identify what a company ownsand owes. The accounting equation is:
Assets = Liabilities + Equity
Assets = Liabilities – Equity
Assets = Liabilities + Revenues
Equity = Liabilities + Revenues
QUESTION 3

______ are beliefs that distinguish right from wrong. Thesebeliefs are accepted standards of gauging good and dishonestbehavior.
Accounting Standards
Ethics
Generally Accepted Accounting Principles
FASB
QUESTION 4

The _____ is a collection of all accounts within a company’saccounting system.
General Journal
Chart of Accounts
General Ledger
Balance Sheet
QUESTION 5

We use the accounting equation to identify what a company ownsand owes. _____ are resources a company owns or controls, _____ areclaims creditors have against a company’s assets, and _____ is theowner’s claim on a company’s assets.

QUESTION 6

In double entry accounting a credit to an asset account willrepresent an increase in the asset account balance; and a debitwill represent a decrease in the asset account balance.
True
False
QUESTION 7

The purchase of supplies on credit will ____ assets and ____liabilities.
Increase, decrease
Decrease, increase
Decrease, decrease
Increase, increase
QUESTION 8

During the accounting cycle, we analyze transactions toprepare statements.
True
False
QUESTION 9

The supplies account for a company has a $1,000 debit balanceat the beginning of the year. Supplies of $2,000 were purchasedduring the year and debited to the Supplies account. A December 31physical count shows $500 of supplies remaining at the end of theyear. Assume no other adjusting entries are made during the year.Using the 3-step process for creating adjusting entries, calculatethe adjustment amount for supplies (no journal entry isrequired).
$1,000 adjustment
$2,000 adjustment
$2,500 adjustment
$3,000 adjustment
QUESTION 10

During the accounting cycle, to complete step 7 youwould:
Prepare post-closing trial balance--Test clerical accuracy ofthe closing procedures.
Prepare adjusted trial balance--Summarize adjusted ledgeraccounts and amounts.
Prepare statements--Use adjusted trial balance to preparefinancial statements.
Close--Journalize and post entries to close temporaryaccounts.
QUESTION 11

The three financial statements that should be prepared duringthe accounting cycle are the:
Balance sheet, adjusted trial balance, income statement
Balance sheet, unadjusted trial balance, Statement of Owner’sEquity
Income statement, adjusted trial balance, Statement of Owner’sEquity
Balance sheet, Income statement, Statement of Owner’sEquity

QUESTION 12

An optional working paper, which is not a required report oran accounting record, but is used to prepare a company's unadjustedtrial balance, adjusting entries, adjusted trial balance, andfinancial statements is a(n):
Adjusted trial balance
Worksheet
Post-closing trial balance
Unadjusted trial balance
General ledger
QUESTION 13

The two goals for completing the closing process are:
To identify accounts for closing and record the closingentries
To journalize and post transactions
To post transactions and prepare post-closing trialbalance
To reset revenues, expenses, and withdrawal account balancesto zero at the end of each period, and help summarize an accountingperiod’s revenues and expenses.
QUESTION 14

Fill in the Blank: The _____ describes a company’s financialposition – by the types and amounts of assets, liabilities, andequity -- at a point in time.

QUESTION 15

Return on Assets is useful in evaluating management, analyzingand forecasting profits, and planning activities.
True
False

QUESTION 16

The Income Statement:
Identifies cash inflows (receipts) and cash outflows(payments) over a period-of-time.
Summarize adjusted ledger accounts and amounts
Describes a company’s revenues and expenses along with theresulting net income or net loss -- over a period-of-time due toearnings activities
Resets revenues, expenses, and withdrawal account balances tozero at the end of each period.
QUESTION 17

An internal control system consists of the policies andprocedures used to:
Protect assets and Ensure reliable accounting
Urge adherence to company policies and Promote efficientoperations
All of the above
None of the above.
QUESTION 18

The cost-benefit principle is the second limitation of_______.
Bank reconciliations
Petty cash controls
Voucher system of controls
Internal controls
QUESTION 19

The Unadjusted Trial Balance columns of a company's work sheetshows the Store Supplies account with a balance of $750. TheAdjustments columns shows a credit of $425 for supplies used duringthe period. The amount shown as Store Supplies in the Balance Sheetcolumns of the work sheet is:
$325 debit
$325 credit
$425 debit
$425 credit
QUESTION 20

A company shows a $600 balance in Prepaid Rent in theUnadjusted Trial Balance columns of the work sheet. The Adjustmentscolumns show expired rent of $200. This adjusting entry resultsin:
$200 decrease to net income
$200 increase to net income
$200 different between the debit and credit columns of theUnadjusted Trial Balance
An error in the Balance Sheet

QUESTION 21

This semester we have discussed four major financialstatements. List the 4 financial statements and describe them. Makesure to include how they flow together.

QUESTION 22

Explain the purpose of adjusting entries at the end of aperiod.