NAME:______DATE:______
iLearn@Home #4 for Advanced Accounting
Review for KOSSA Exam
Directions: Answer the following questions.
True/False
Indicate whether the statement is true or false.
____ 1. The accounting period is not part of the heading for financial statements.
____ 2. Net Sales is the difference between total sales and the sales returns and allowances.
____ 3. A single line under a total indicates the section is a grand total amount.
____ 4. When an owner takes out merchandise or cash for personal use the capital account is used to record the transaction.
____ 5. The left side of a T-Account is called a credit.
____ 6. The left side of a T-Account is the normal balance side.
____ 7. To credit an account is to enter an amount on the left side of the account.
____ 8. Liability accounts have a normal debit balance.
____ 9. Increases in revenues are recorded as debits.
____ 10. Expense accounts have normal debit balances.
____ 11. To debit any account will increase it.
____ 12. Asset and expense accounts normally have debit balances.
____ 13. Every transaction must have at least one debit and one credit.
____ 14. Posting is copying of exact dates and debit/credit amounts from the ledger to the journal.
____ 15. At least 2 accounts are affected in every transaction.
____ 16. When journalizing accumulated depreciation for a period, you are completing a closing entry.
____ 17. The first step in the accounting cycle is analyzing transactions and source documents.
____ 18. Examples of subsidiary ledger accounts are accounts receivable, sales, capital, and notes payable.
____ 19. The general ledger is referred to as the book of original entry.
____ 20. The general journal lists all of the debit and credit balances for all accounts for a specific accounting period.
____ 21. A credit union is non-profit institution which is owned and controlled by the government.
____ 22. When Special Endoresement is used the payee is signing the check over to a third party to be cashed or deposited.
____ 23. Deposits recorded in the check register but not cleared on the bank statement are considered an outstanding deposit.
____ 24. The ending balance of your bank statement should always be the same as the balance in your check register on the same day.
____ 25. Float is the time it takes for your check to clear the bank and return back to you.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 26. Which of the following is not a type of financial statement?
a. / Balance Sheet / c. / Work Sheetb. / Income Statement / d. / Statement of Owner’s Equity
____ 27. ______contains all accounts needed to prepare a financial statement.
a. / Accounts / c. / Journalb. / Elements / d. / General Ledger
____ 28. ______is a table listing all accounts used by a company usually have account numbers assigned to accounts.
a. / Chart of Accounts / c. / Ledgerb. / General Ledger / d. / Transaction table
____ 29. A(n) ______account is when payment for sales is collected at a later date.
a. / Accounts Payable / c. / Billablesb. / Accounts Receivable / d. / Notes Receivable
____ 30. Which of the best represents the accounting equation?
a. / Total Assets = Current Liabilities + Owner’s Captial / c. / Assets - Liabilities = Owner’s Equityb. / Assets = Liabilities - Owner’s Equity / d. / Total Assets = Total Liabilities - Total Owner’s Equity
____ 31. Which of the following is NOT part of a T-Account?
a. / Debit / c. / Titleb. / Credit / d. / Source Document
____ 32. The accounting equation may be expressed as ______.
a. / A = L - OE / c. / L = OE - Ab. / A = L + OE / d. / All of the above
____ 33. An investment of cash by the owner will ______.
a. / Increase assets and owner’s equity / c. / Increase liabilities and owner’s equityb. / Increase assets and revenue / d. / Increase owner’s equity, and decrease liabilities
____ 34. To record payment of rent, an accountant would ______.
a. / debit cash; debit rent expense / c. / debit rent expense, credit cashb. / debit cash, credit rent expense / d. / credit rent expense, credit cash
____ 35. Which of the following is NOT a type of business ownership?
a. / Duel Partnership / c. / Partnershipb. / Sole Proprietorship / d. / Corporation
____ 36. An advantage of a partnership is ______.
a. / Stock ownership / c. / Unlimited liabilityb. / Your the boss / d. / Sources of capital easier
____ 37. Advantages of E-Commerce include all the following EXCEPT:
a. / Personal Assistance / c. / Saves moneyb. / 24/7 shopping / d. / Reach more customers
____ 38. Accounting is ______.
a. / The official language for business transactions regarding financial statements. / c. / Analyzingb. / Planning / d. / All of the above
____ 39. Which is NOT one of the five classifications of accounts?
a. / Assets / c. / Expenseb. / Revenue / d. / Stock
____ 40. What is an asset?
a. / Something we owe / c. / Accounts Payableb. / A bill / d. / Something we own
____ 41. What is a liability?
a. / Normal debit balance / c. / Something we oweb. / Something we own / d. / Sales
____ 42. Which of the following is NOT considered an Owner’s Equity Account?
a. / Common Stock / c. / Retained Earningsb. / Capital / d. / Investment Sales
____ 43. An increase in owner’s equity from a sale of goods or services is ______.
a. / Revenue / c. / Drawingb. / Expense / d. / Liability
____ 44. Changes in the accounting equation is called ______.
a. / Debits / c. / Transactionsb. / Normal Balance / d. / Journals
____ 45. Which statement is NOT true regarding a normal balance?
a. / Assets on left / c. / Liabilities on rightb. / Side of the account that increases / d. / Owner’s equity on left
____ 46. When a customer buys on account what accounts are affected?
a. / A/R and Sales / c. / A/R and Cashb. / A/P and Sales / d. / A/P and Cash
____ 47. All of the following are examples of source documents EXCEPT ______.
a. / Cash / c. / Bank statementb. / Invoice / d. / Register Tapes
____ 48. Which question below is NOT one of the 3 main questions you ask when recording transactions?
a. / What accounts are affected? / c. / Does the account increase or decrease?b. / Is the account open? / d. / What is the normal balance of the accounts?
____ 49. Which type of business is owned and operated by its members for the purpose of saving money on the purchase of certain goods and services?
a. / Franchise / c. / Corporationb. / Cooperative / d. / Non-Profit
____ 50. Which is the professional organization of CPAs?
a. / FASB / c. / AICPAb. / GAAP / d. / SEC