Bookkeeping (Test for Prospective Employees #2)

1. The chart of accounts is a list of the accounts which have balances.

2. Accounts are contained in the general __________.

3. The bookkeeping or accounting equation is: assets = __________ + owner’s equity.

4. The word that indicates the left side of a T-account is __________.

5. The type of balance expected in a liability account.

6. A debit to the general ledger account Equipment will __________ the account balance.

7. The account Sales Discounts is likely to have a __________ balance.

8. If a bank credits a company’s checking account for interest that the company has earned, the interest amount should be entered as a __________ in the company’s general ledger account entitled Cash – Checking.

9. The normal balances for both asset accounts and expense accounts are debit balances.

10. If the account Allowance for Doubtful Accounts has a balance, the balance should be a __________ balance.

11. The expected balance in the account Customer Deposits is a __________ balance.

12. In a manual accounting system, which accounts have their balances closed before the start of a new accounting year?

13. An internal report that shows whether the general ledger debits are equal to the credits is the trial __________.

14. A vendor’s invoice of $1,000 has credit terms of 1/10, net 30. If the vendor authorized an allowance of $100, the amount due if paid within 10 days is $__________.

15. The __________-way match in accounts payable involves the vendor’s invoice, the company’s purchase order and the company’s receiving report.

16. The cost of goods purchased but not yet sold is reported by a retailer in its balance sheet account entitled __________.

17. Checks which have been received from customers but have not been deposited in the bank are reported as part of a company’s cash.

18. Which of the following financial statements will report amounts as of a specified date (as opposed to amounts for a specified period of time)?

19. Which of the following financial statements is known as the statement of financial position.

20. The “S” in SG&A represents

21. Generally a current asset is expected to turn to cash within one year of the date of the balance sheet.

22. In addition to the balance sheet and the income statement, another important financial statement is the statement of cash ______________.

23. Gross profit is net __________ minus the cost of goods sold.

24. The cost of goods sold can be computed as __________ __________ plus net purchases minus ending inventory.

25. A company has a loan payable that requires monthly payments of interest and principal for an additional 3 years. Is it true or false that part of the principal balance is a current liability and part is a noncurrent liability?

26. It is expected that a retailer will have to pay sales taxes to the suppliers of merchandise it has purchased for resale.

27. The cost of a vehicle that is used in a business minus its accumulated depreciation is the vehicle’s __________ value.

28. The general ledger account Prepaid Expenses is __________ account.

29. Under the accrual method of accounting, a company may be required to report an expense on its income statement before receiving an invoice from the vendor.

30. When a company defers an amount presently recorded in an expense account, the amount that is deferred will be transferred to __________ account.

31. The accrual of revenue will occur automatically when accounting software is used.

32. A reversing entry will be the opposite of an accrual-type adjusting entry that was recorded in the previous accounting period.

33. NSF is the acronym for Not __________ Funds.

34. When reconciling the bank statement to the correct balance, the bank service charge will be entered as a deduction from the balance per __________.

35. Checks written by a company but not yet clearing the bank are shown on the bank reconciliation as __________ checks.

36. Social Security taxes and Medicare taxes apply to every dollar of every employee’s wages or salaries.

37. Form W-9 is associated with amounts paid to __________.

38. Salaried employees earning $17,000 per year are usually exempt from being paid overtime for hours in excess of 40 per week.

39. James has an hourly pay rate of $10 per hour and is paid overtime at time and a half. If he works 8 hours on each of 4 days and works 12 hours on the 5th day, his gross wages for the week will be $__________.

40. The separation of duties is a way to improve a company’s control of its assets.