Accounting II Exam Flashcards

Terms Definitions
ledger
group of accounts
FOB shipping point
purchaser pays
Temporary differences affect the timing of when revenues and expenses are recognized for tax purposes and as a result, the total amount of taxes paid does not change
True
receiving point
a business form to notify
Bonds
A form of interest-bearing notes payable issued by corporations, universities, and governmental entities.
Transferring informaton from a journal entry to ledger account
Posting
work sheet
columnar accounting form used to summarize the general ledger information needed to prepare financial statements
Deficit
A debit balance in the retained earnings account. 572
In liquidation, balances prior to the distribution of cash to the partners are: Cash $360,000; Peterson, Capital $168,000; Staley, Capital $156,000, and Klugman, Capital $36,000. The income ratio is 6:2:2, respectively. How much cash should be distributed
$168,000.
Mortgage bond
A bond secured by real estate.
Accounts receivable that cannot be collected
uncollectible accounts
T or F: A departmentalized business does not prepare a post-closing trial balance
FALSE
T or F: A merchandise inventory turnover ratio expresses a relationship between an average inventory and the cost of merchandise sold.
TRUE
wholesalers
who buy goods from suppliers and make a thing for sale to retailers
bank statement
a report of deposits, withdrawals, and bank balance sent to a depositor by a bank
Outstanding Stock
The stock in the hands of stockholders. 572
Subsidiary company
The corporation that is controlled by a parent company.
In published annual reports
A. subdivisions within the stockholders’ equity section are routinely reported in detail. B. capital surplus is used in place of retained earnings. C. the individual sources of additional paid-in capital are often combined. D. retained earnings is often not shown separately.
When the market rate of interest is less than the contract rate for a bond, the bond will sell for a premium
True
Each amount written in the Accounts Receivable Credit column of a sales returns and allowances journal is
posted monthly
A form used during a periodic inventory to record information about each item of merchandise on hand
Incentory record
schedule of accounts payable
list of vendor accounts, account balances, and total amount due all vendors
Discontinued operations
Operations of a major line of business or component for a company, such as a division, a department, or a certain class of customer, that have been disposed of. 617
Stated value
The amount per share assigned by the board of directors to no-par stock.
Sinking fund bonds
Bonds secured by specific assets set aside to retire them.
Monetary Unit Concept
Always use Dollars ($$) to record transactions, even when in another currency.
A financial statement that shows changes in a corporation's ownership for a fiscal period
statement of stockholders' equity
T or F: When a customer account is known to be uncollecitble, the account is no longer an asset
TRUE
T or F: A business with very few uncollectible accounts should probably use the allowance method of recording uncollectible accounts expense
FALSE
T or F: Employers are required by lay to withold certain payroll information a business must keep and report
TRUE
T or F: Each amount in the Accounts Receivable Credit column of a departmental cash receipts journal is posted individually to the accounts receivable ledger
TRUE
Net realizable value
The estimated selling price of an item of inventory less any direct costs of disposal, such as sales commissions.
Which of the following statements about a partnership is correct?
A partnership represents an accounting entity for financial reporting purposes.
The price of a bond is equal to the sum of the interest payments and the face amount of the bonds
False
What is the accounting equation?
Assets = Liabilities + Owner's Equity.
T or F: Both the debit part and the credit part of a cash and credit card sales transaction are entered in special amount columns in a departmental cash receipts journal
TRUEE
A journal used to record only one kind of transaction
Special Journal
Unrealized holding gain or loss
The difference between the fair market value of the securities and their cost. 623
Dual Effect of Transactions
A company must make at least two changes in its assets, liabilities, or owner's equity when it records each transaction.
Recording all sales at the time of scale, regardless of when payment is made, is an application of the
Realization of Revenue concept
A corporation purchases 30,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders’ equity?
Increase by $1,050,000 Decrease by $600,000 Decrease by $1,050,000 Increase by $600,000
An income ratio based on capital balances might be appropriate when
funds invested in the partnership are considered the critical factor.
In the liquidation process, if a capital account shows a deficiency
the partner with a deficiency has an obligation to the partnership for the amount of the deficiency.
Ard, Ball, and Dole have partnership capital account balances of $400,000 each. Income and losses are shared equally. Dole agrees to sell three-fourths of his ownership interest to Ard for $350,000 and one-fourth to Ball for $125,000. Ard and Ball will us
Debit Dole Cap 400,000 CR Ard Cap 300,000 CR Ball Cap 100,000
A $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. The entry to record the retirement would include a
Bonds payable 600000Discount on BDS pay 22000 Gain on bond redeem 4000 Cash 618000
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