Download FBLA ACCOUNTING II

2004 Accounting II
Indicate whether the sentence or statement is True or False. Mark “A” if the answer is True or “B” if the answer is False.
1. When a payment is made to a vendor, the amount will be a. True
b. False
posted as a credit in the Accounts Payable ledger.
2. A report of deposits, checks written, ATM transactions,
a. True
b. False
service charges, and the bank balance sent to an account
holder by the bank is called a bank statement.
3. A purchase of merchandise on account is posted as a
a. True
b. False
debit to the customer’s account in the subsidiary ledger.
4. Separate cost accounts are set up for each department in
a. True
b. False
a departmental accounting system.
5. The cash account should be adjusted on the work sheet
a. True
b. False
to bring it up to date.
6. In a partnership, each partner is personally liable for the
a. True
b. False
debts of the partnership.
7. A corporation must pay federal income taxes on its
a. True
b. False
profits.
8. Sales Returns and Allowances are listed on the Balance
a. True
b. False
Sheet.
9. The Retained Earnings account shows the dividends
a. True
b. False
issued to stockholders.
10. The Statement of Stockholders’ Equity shows changes in a. True
b. False
partners’ capital accounts for a fiscal period.
11. Unemployment taxes are withheld from employees’
a. True
b. False
paychecks.
12. Salaries Payable is an example of an accrued expense.
a. True
b. False
13. A plant asset record is used to keep track of the
a. True
b. False
accumulated depreciation and book value for each plant
asset owned by the company.
14. An example of an accelerated method of depreciation is
a. True
b. False
the straight-line method.
15. Organization costs are an intangible asset that is
a. True
b. False
amortized over a period of years.
16. A debit amount posted to a customer’s account indicates a. True
b. False
an amount paid on account.
17. Allowance for Uncollectible Accounts reduces the
a. True
b. False
amount of accounts receivable a company will realize.
18. The net income of a corporation is subject to double
a. True
b. False
taxation as corporate income and stockholders’ personal
income in the form of dividends.
19. In a departmental account system, gross profit is
a. True
b. False
calculated for each department.
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2004 Accounting II
20. Both Accounts Payable and the vendor’s individual
a. True
account should be debited when a purchase is made on
account.
21. Source documents should be discarded at the end of the
a. True
fiscal year to make room for next year's documents.
22. Subsidiary ledgers are used to maintain accounts
a. True
receivable and accounts payable balances.
23. Partners are required by law to split profits equally in a
a. True
partnership.
24. The balance sheet reports net income or net loss of the
a. True
business for the fiscal period.
25. The number of times the average amount of merchandise a. True
inventory is sold during a specific time period is called
the merchandise inventory turnover ratio.
Mark the correct answer on your Scantron sheet for each of the following questions.
26. The following are all examples of payroll deductions
a. state sales tax.
except
27. The method that uses scanners to keep inventory
a. perpetual.
constant and up to date is
28. A plant asset record includes all of the following except
a. date of purchase.
29. Which of the following is not a factor in preparing a
bank reconciliation?
30. If a company has a total revenue of $150,000, cost of
goods sold of $59,600, and total expenses of $72,985, its
gross profit is
31. The method of depreciation that records the same
amount each year is called
32. Which of the following transactions would result in a
debit and a credit to the same general ledger account?
33. Which of the following is not a factor in proving cash?
34. Which of the following is used to record a company’s
entire payroll for one pay period?
35. Which of the following would be recorded in the Sales
Journal?
36. Which of the following is the correct entry for a payroll?
a. Outstanding
checks
a. $ 77,315.
a. units of
production.
a. Discarding a plant
asset
a. Balance of the
Accounts Receivable
account
a. Employee
earnings record
a. Sale of old office
equipment for cash
a. Debit Cash/credit
Salary Expense and
payroll deductions
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b. False
b. False
b. False
b. False
b. False
b. False
b. federal income
tax.
b. consignment.
c. FICA taxes.
c. periodic.
d. employee health
insurance.
d. quality control.
b. name of
purchaser.
b. Outstanding
deposits
b. $ 17,415.
c. depreciation rate.
d. original cost.
c. Amount of petty
cash
c. $132,585.
d. Service charges
b. double declining
balance.
b. Trading in a plant
asset
b. Balance of Cash at
the beginning of the
month
b. Payroll register
c. straight line.
d. sum-of-the-years’
digits.
d. Purchasing a new
plant asset with cash
d. Cash paid during
the month
b. Sale of old office
equipment on
account
b. Debit Salary
Expense and
Cash/credit payroll
deductions
c. Selling a plant
asset
c. Cash received
during the month
c. Commissions
record
c. Cash sale of
merchandise
c. Debit payroll
deductions/credit
Cash and Salary
Expense
d. $ 90,400.
d. Gross profit
statement
d. Sale of
merchandise on
account
d. Debit Salary
Expense/credit
payroll deductions
and Cash
2004 Accounting II
37. The Accounts Payable subsidiary ledger contains
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a. customers’
account balances.
a. stock subscribed.
b. vendors’ account
balances.
b. cash.
a. book value of
accounts receivable.
b. bad debts expense.
a. Debit Accounts
Receivable and
customer/credit
Purchases
a. common stock.
c. employee payroll
records.
c. subscriptions
receivable.
c. loss on plant
assets.
d. petty cash records.
b. Debit
Purchases/credit
Accounts Receivable
and customer
b. preferred stock.
c. Debit Accounts
Payable and
vendor/credit
Purchases
c. treasury stock.
d. Debit
Purchases/credit
Accounts Payable
and vendor
d. equity stock.
a. Debit Cash and
Sales
Discounts/credit
Accounts Receivable
and customer
a. Balance Sheet
b. Debit Accounts
Receivable and
customer/credit Cash
and Sales Discounts
a. book value of
plant assets.
a. direct write off.
d. Debit Accounts
Receivable and
customer/credit Cash
and Purchases
Discount
d. Plant Asset
Record
d. net sales.
a. FIFO.
b. uncollectible
accounts.
b. percentage of
accounts receivable.
b. LIFO.
c. Debit Cash and
Purchases
Discounts/credit
Accounts Receivable
and customer
c. Owner’s Equity
Statement
c. net purchases.
a. Asset
b. Current liabilities
c. aging accounts
receivable.
c. Comparative
Average.
c. Revenue
a. Asset
b. Current liabilities
c. Revenue
48. Loss on Plant Assets
a. Asset
b. Current liabilities
c. Revenue
49. Sales Discounts
a. Asset
b. Current liabilities
c. Revenue
50. Unearned Rent
a. Asset
b. Current liabilities
c. Revenue
51. Prepaid Interest
a. Asset
b. Current liabilities
c. Revenue
52. Interest Payable
a. Asset
b. Current liabilities
c. Revenue
53. An independent review by the IRS to determine the
reliability of accounting records is called
a. auditing.
b. financial planning.
c. managerial
accounting.
d. percentage of net
sales.
d. Weighted Average
Cost.
d. Cost of
merchandise
d. Cost of
merchandise
d. Cost of
merchandise
d. Cost of
merchandise
d. Cost of
mercha=dise
d. Cost of
merchandise
d. Cost of
merchandise
d. systems analysis.
38. The account debited to journalize a final payment on a
stock subscription is
39. The difference between the balance of Accounts
Receivable and its contra account, Allowance for
Uncollectible Accounts, is called
40. A purchase of merchandise on account would result in
which of the following?
41. Stock issued by a corporation, then reacquired and held
is called
42. A cash receipt that includes a cash discount for a
payment from a customer on account would result in
which of the following?
43. On which of the following financial statements would
Purchases Returns and Allowances appear?
44. Sales, minus Sales Discounts, Sales Returns, and
Allowances is known as
45. The most accurate method of figuring the allowance for
uncollectible accounts is
46. The assumption that the most recently purchased
merchandise is sold first is called
Use the following choices to identify the classification for
the accounts in questions 47-52.
47. Purchases Returns and Allowances
b. Income Statement
d. common stock.
d. accumulated
depreciation.
e. Expenses
e. Expenses
e. Expenses
e. Expenses
e. Expenses
e. Expenses
e. Expenses
2004 Accounting II
54. A written promise to pay a certain amount of money on
a specific date is called
55. The proceeds of an 8%, 3-month discounted note with a
face value of $1,200 would be
56. Which of the following is the correct adjustment to
record annual depreciation of a plant asset?
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d. earned interest.
b. $1,224.00.
c. stockholders’
dividend.
c. $1,104.00.
a. Debit Depreciation
Expense/credit Cash
b. Debit
Depreciation
Expense/credit
Accumulated
Depreciation
c. Debit
Accumulated
Depreciation/credit
Depreciation
Expense
57. Which of the following accounts would not be needed
for the purchase of merchandise on account?
58. Which of the following forms is filled out by a newlyhired employee for withholding taxes?
59. The Accumulated Depreciation for Office Equipment
would be extended to which column on a worksheet?
60. Which of the following is not a method of figuring the
allowance for uncollectible accounts adjusting entry?
a. Purchases
b. Accounts Payable
c. Sales Tax Payable
d. Debit
Uncollectible
Accounts
Expense/credit
Accumulated
Depreciation
d. Vendor’s account
a. W2
b. W4
a. Income Statement
debit
a. Percentage of net
sales
d. Withholding tax
tables
d. Balance Sheet
credit
d. Direct write off
Choose one of the following journals for the transactions in
questions 61-67.
61. Purchase of merchandise for cash
a. Purchases Journal
b. Income Statement
credit
b. Percentage of
accounts receivable
account balance
b. Sales Journal
c. Quarterly tax
report
c. Balance Sheet
debit
c. Aging accounts
receivable
a. Purchases Journal
b. Sales Journal
62. Purchase of new equipment on account
a. Purchases Journal
b. Sales Journal
63. Recording employer’s payroll taxes for the current
payroll
64. Receipt of cash for the sale of old equipment
a. Purchases Journal
b. Sales Journal
a. Purchases Journal
b. Sales Journal
65. Cash sales of merchandise
a. Purchases Journal
b. Sales Journal
66. Purchase of merchandise on account
a. Purchases Journal
b. Sales Journal
67. Purchase of supplies on account
a. Purchases Journal
b. Sales Journal
68. Entries used to bring an account up to date on the
worksheet at the end of a fiscal period are called
69. The $1,500 rent paid per month is a
70. Which of the following items on a bank statement would
be subtracted from your checkbook balance?
71. Which of the following payroll deductions is matched by
the employer?
a. correcting entries.
b. closing entries.
c. Cash Payments
Journal
c. Cash Payments
Journal
c. Cash Payments
Journal
c. Cash Payments
Journal
c. Cash Payments
Journal
c. Cash Payments
Journal
c. Cash Payments
Journal
c. Cash Payments
Journal
c. adjusting entries.
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. Cash Receipts
Journal
d. allowance entries.
a. fixed cost.
a. Outstanding
deposits
a. Federal income
taxes
b. variable cost.
b. Outstanding
checks
b. State income taxes
c. total cost.
c. Service charges
d. breakeven cost.
d. Beginning
statement balance
d. FICA taxes
a. savings bond.
b. promissory note.
a. $
24.00.
c. Unemployment
taxes
d. $1,176.00.
e. General
Journal
e. General
Journal
e. General
Journal
e. General
Journal
e. General
Journal
e. General
Journal
e. General
Journal
e. General
Journal
2004 Accounting II
72. The journal entry to record the payment of sales tax
would be
73. Unemployment taxes are usually paid how often by an
employer?
74. Which of the following actions is performed in
reconciling a bank statement?
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a. debit Sales Tax
Expense/credit Cash.
a. Weekly
b. debit Sales Tax
Payable/credit Cash.
b. Monthly
c. debit Cash/credit
Sales Tax Payable.
c. Quarterly
d. debit Cash/credit
Sales.
d. Annually
a. Subtract credit
card fees from your
check register
a. Sales
b. Subtract canceled
checks from the
statement balance
b. Retained Earnings
c. Add outstanding
checks to the
statement balance
c. Purchases
d. Add service
charges to your
check register
d. Sales Discount
a. original cost.
b. useful life.
c. depreciation.
d. salvage value.
a. Purchases
b. Sales
c. Accounts Payable
a. par value.
b. common value.
c. preferred value.
d. Accounts
Receivable
d. charter value.
a. sales invoice.
b. cash register tape.
80. The journal entry to record a corporation’s payment of
dividends would be
81. The return of merchandise from a customer would result
in which of the following journal entries?
a. debit Dividends
Expense/credit Cash.
a. Debit Accounts
Receivable and
customer/credit Sales
and Sales Tax
Payable
b. debit Dividends
Payable/credit Cash.
b. Debit Accounts
Receivable and
customer/credit Sales
Returns and
Allowances and
Sales Tax Payable
c. debit
memorandum.
c. debit Cash/credit
Dividends Income.
c. Debit Sales and
Sales Tax
Payable/credit
Accounts Receivable
and customer
82. A net loss would appear in which column of the
worksheet?
83. Which of the following would not appear on the Income
Statement?
84. The journal entry to record a payment on account with a
discount for merchandise bought from a vendor is
a. Income Statement
debit
a. Net Worth
b. Income Statement
credit
b. Net Income
c. Adjustment debit
a. debit
Purchases/credit
Cash.
b. debit Accounts
Payable and
vendor/credit Cash.
85. An actual physical count of merchandise is called a
a. periodic inventory.
86. The cost of inventory includes all except which of the
following?
a. Transporting the
merchandise to the
company
b. perpetual
inventory.
b. The price of the
merchandise
c. debit Accounts
Payable and
vendor/credit Cash
and Purchases
Discount.
c. LIFO inventory.
75. In departmentalized accounting, which of the following
account does not need to be separated by department?
76. The estimated value of a plant asset at the time of its
disposal is called
77. Which account would be credited when a company buys
merchandise on account?
78. A specific value assigned to a share of stock and printed
on the stock certificate is called
79. The source document used to record cash sales is a
c. Net Loss
c. Advertising the
merchandise to the
public
d. purchase invoice.
d. debit Cash/credit
Dividends Payable.
d. Debit Sales
Returns and
Allowances and
Sales Tax
Payable/credit
Accounts Receivable
and customer
d. Balance Sheet
credit
d. Operating
Expenses
d. debit Purchases
Discount, Accounts
Payable, and
vendor/credit Cash.
d. FIFO inventory.
d. Getting the
merchandise ready
for sale
2004 Accounting II
87. The last step in posting from a journal to the ledger
account is
88. The Accounts Receivable account is a
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a. recording the
account number in
the journal.
a. contra account in
the subsidiary ledger.
b. recording the page
number of the
journal in the
account.
b. controlling
account in the
subsidiary ledger.
b. Office Equipment
89. A business would not record depreciation for which of
a. Store Equipment
the following plant assets?
90. The number of times per year that a company collects
a. price earnings
b. accounts
the average balance of accounts receivable is called
ratio.
receivable turnover.
91. The value of an asset determined by tax authorities for
a. assessed value.
b. real value.
the purpose of calculating taxes is called the
92. The decrease in the value of a plant asset due to removal a. depreciation.
b. devaluation.
of a natural resource is called
Use the following partial Income Statement to choose the correct amounts in questions 93-97.
XYZ COMPANY
Income Statement
Sales
c. transferring the
amount in the debit
or credit column.
d. finding the new
balance in the
account.
c. contra account in
the general ledger.
d. controlling
account in the
general ledger.
d. Land
c. Buildings
c. current ratio.
c. property value.
d. merchandise
inventory turnover.
d. current value.
c. depletion.
d. disposition.
$218,750
Sales Discounts
Sales Returns & Allowances
Beginning Inventory
Purchases
Purchases Discounts
Purchases Returns & Allowances
Ending Inventory
$2,375
890
595,900
127,450
1,265
960
650,425
Total Expenses
104,600
93. Net Sales
a. $222,015
b. $215,485
c. $216,375
d. $ 3,265
94. Net Purchases
a. $125,225
b. $123,960
c. $129,675
d. $ 2,225
95. Merchandise Available for Sale
a. $1,246,325
b. $ 257,125
c. $ 346,200
d. $ 721,125
96. Cost of Merchandise Sold
a. $127,450
b. $125,225
c. $114,150
d. $ 70,700
97. Gross Profit on Sales
a. $241,600
b. $148,050
c. $144,785
d. $114,150
Calculate how net income of $50,000 would be distributed to partners Smith and Jones in each of the following cases for questions 98-100. Smith’s equity is $40,000 and Jones’
equity is $60,000.
98. Smith receives 65% of net income; Jones receives 35%.
a. Smith $17,500;
b. Smith $32,500;
c. Smith $21,125;
d. Smith $28,875;
Jones $32,500
Jones $17,500
Jones $28,875
Jones $21,125
99. Each partner receives 10% interest on equity, sharing the a. Smith $44,000;
b. Smith $22,000;
c. Smith $26,000;
d. Smith $24,000;
remaining net income equally.
Jones $6,000
Jones $28,000
Jones $24,000
Jones $26,000
2004 Accounting II
100. Smith receives a salary of $25,000; Jones receives
$18,000. They share remaining net income at 55% for
Smith and 45% for Jones.
Page 7
a. Smith $28,850;
Jones $21,150
b. Smith $21,150;
Jones $28,850
c. Smith $3,850;
Jones $3,150
d. Smith $3,150;
Jones $3,850
2004 Accounting II
Page 8
2003 FBLA ACCOUNTING II ANSWER KEY
1.
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