Bookkeeping (Test for Prospective Employees #3)

1. A chart of accounts is a listing of the balances in the general ledger accounts.

2. The bookkeeping or accounting equation is assets = liabilities + owner’s __________.

3. The __________-entry system requires that amounts be recorded in at least two accounts for each transaction.

4. When goods are sold on credit, the account that is debited is __________.

5. When goods are purchased on credit, the account that is credited is __________.

6. The entry on the right side of a T-account is a __________.

7. When a company’s six-year-old delivery truck is sold for cash, the cost of the delivery truck will be __________ to the account Delivery Trucks.

8. The account Accumulated Depreciation will usually have a __________ balance.

9. The account Interest Expense is expected to have a __________ balance.

10. The normal balance for most revenue accounts is a __________ balance.

11. At the instant when a corporation purchases new equipment for cash, the amount of stockholders’ equity will __________.

12. A characteristic of a transposition error (switching digits) is that the difference will be evenly divisible (no remainder) by the digit __________.

13. In a manual accounting system, the balances in the revenue accounts and the expense accounts are __________ prior to the start of each accounting year.

14. Prior to entering a vendor’s invoice into Accounts Payable, the information on the invoice should be compared to the pertinent __________ order.

15. A vendor’s invoice includes terms of 2/10, net 30. If the invoice amount is $2,000 before a vendor allowance of $100, the amount to be remitted if paid within 10 days is $__________.

16. Which financial statement reports the assets and liabilities of a company?

17. The balance in a corporation’s account Retained Earnings should be approximately equal to the balance in the corporation’s Cash account.

18. Net sales minus the cost of goods sold is the amount of a retailer’s __________ profit.

19. An aging of accounts __________ will be helpful in determining the correct balance for the account Allowance for Doubtful Accounts.

20. A company that did not pay sales taxes on an out-of-state purchase of items that were subject to its state’s sales tax may be liable for a use tax.

21. The future interest on a loan payable should be part of the amount reported in the balance sheet liability account Loans Payable or Notes Payable.

22. The sales taxes collected by a retailer are part of its sales revenues.

23. Under the accrual method of accounting, an expense may need to be reported on the income statement prior to receiving an invoice from the vendor.

24. One of the accounts involved in the accrual of an expense is __________ account.

25. Prepaid Insurance is an example of __________ expense.

26. Interest earned on a bank certificate of deposit that pays interest quarterly will require __________ adjusting entry when a company prepares monthly financial statements.

27. Customer Deposits and Deferred Revenues are two examples of __________ accounts.

28. When the same amount of depreciation expense is reported in each year of an asset’s life, it is referred to as __________ – line depreciation.

29. The goal of depreciation is to have the balance sheet report the current market value of assets such as buildings and equipment.

30. Which type of adjusting entry is more likely to have a reversing entry?

31. In the bank statement reconciliation a bank charge for check printing will require a __________ entry to one of the company’s cash accounts.

32. When preparing a bank reconciliation which is designed to show the correct or adjusted balance, a deposit in transit is added to the balance per __________.

33. If employees are paid semimonthly, the number of paydays per year will be __________.

34. The form given to an employer to indicate an employee’s marital status and number of dependents is known as a W-2.

35. Sally is paid an hourly wage of $10 per hour and is paid overtime at the rate of time and a half. If she works 9 hours per day for five weekdays, her gross wages will be $__________.

36. FICA refers to which of the following?

37. A proprietor’s draw of $3,000 per month is recorded by debiting the account Salaries Expense.

38. A U.S. company with 15 employees is likely to pay two unemployment taxes: federal and state.

39. The amount of a company’s current assets minus the amount of its current liabilities is the amount of its _________________ capital.

40. Separating the duties of money counting and recordkeeping is a step toward improving a company’s internal _______________.