Accounting 1 Study Guide-review Activity

8/16/2019 Accounting 1 Study Guide-review Activity

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Accounting 1 Study Guide / Review Activity

Accounting 1 Study Guide/Activity Review

General Instructions

You have been hired as a Financial Assistant and will be keeping the accounting records forProfessional Business Associates located at 5454 Cleveland Avenue, Columbus, hio 4!"!#$Professional Business Associates provides accounting and other financial services for clients$ Youwill complete %obs for Professional Business Associates& own accounting records as well as forclients$

'his packet contains activities and (uestions that cover an entire Accounting C)cle$

Good luck!



Accounting 1 Study Guide/Review Activity

*ecord the best answer for each of the following (uestions on the form provided$

#$ Figure +ee&s capital balance taking into consideration the following information• Beginning capital balance -4.,///

• 0et income for the period -#.,///

• 'otal sales for the period -!/,///• wner&s withdrawal - ",///

• Additional investments b) the owner - 5,///

• 1ncome 'a2es Pa)able - 5,4//A$ -33,///B$ -3,///C$ -!,3//$ -3/,3//

"$ 6hich of the following groups consists of accounts that will have 7ero balances after theclosing process is completed8

A$ Allowances for Bad ebts and 9ncollectible Accounts :2penseB$ Purchases and Purchases *eturns and AllowancesC$ ;erchandise 1nventor) and <ales$ epreciation :2pense and Accumulated epreciation

!$ 'he time within which an invoice must be paid, in order to receive an amount off theinvoice price, is called a =============$A$ due dateB$ processing timeC$ purchases discount$ discount period

4$ 1f a business has a net loss for the period, the %ournal entr) to close the balance of the1ncome <ummar) account is ===================$A$ a debit to wner&s Capital, a credit to 1ncome <ummar)B$ a debit to Fees, a credit to wner&s CapitalC$ a debit to 1ncome <ummar), a credit to wner&s Capital$ a debit to wner&s Capital, a credit to Fees

5$ A credit memo was issued for ->5 plus 3? ta2 for merchandise returned b) a chargecustomer$ 'he entr) to record the return would be

ebit CreditA$ Accounts *eceivable ->5$// <ales ->/$//

<ales 'a2 Pa)able 5$//B$ <ales *eturns @ Allowances >5$// Accounts *eceivable >5$//C$ <ales *eturns @ Allowances >5$// Accounts *eceivable ./$5/

<ales 'a2 Pa)able 5$5/$ <ales *eturns @ Allowances >5$// Accounts *eceivable >$5/

<ales 'a2 Pa)able 4$5/

3$ 'he purchases account is a ================$A$ permanent account




B$ temporar) accountC$ subsidiar) account$ e2pense account

>$ 'he amount of purchases for a period is presented in the ==============$A$ liabilities section of the balance sheetB$ revenue section of the income statementC$ cost of goods sold section of the income statement$ e2pense section of the income statement

.$ Figure 'on)&s net purchases from the following informationPurchases -#.,5//Purchases returns @ allowances #,///Purchases discounts 45/<ales returns @ allowances !//<ales discounts #//

A$ -#3,3//

B$ -#>,/5/C$ -#>,#5/$ -#>,"5/

$ 'he source document for recording a purchase of merchandise for cash is a =========$A$ purchase order B$ purchase invoiceC$ purchase re(uisition$ check number

#/$ :ntr) to record purchase of supplies on credit includes

A$ debit to purchases and credit to accounts receivableB$ debit to supplies and credit to accounts pa)ableC$ debit to accounts pa)able and credit to supplies$ debit to accounts pa)able and credit to purchases

##$ 0icole&s account in the accounts pa)able ledger has a -",.5/ beginning balance$ After atransaction for -// is posted from the purchases %ournal, the balance in 0icoles accountis =========$A$ -// debitB$ -!,>5/ debitC$ -// credit$ -!,>5/ credit

#"$ 6hich of the following is a factor in the determination of the amount of <ocial <ecurit)ta2 to withhold from an emplo)ee&s pa)8A$ gross wagesB$ marital status




C$ withholding allowances$ rate of pa)

#!$ 0gu)en earns -#!$5/ per hour and works a 4/hour week$ 'he following deductionsappl) to wages

Federal 1ncome 'a2 -3/<ocial <ecurit) 'a2 3$5?;edicare 'a2 #$5?

0gu)en&s net pa) isA$ -4!!$./B$ -4!4$./C$ -4!5$./$ -4!3$./

#4$ Antonio earns -#" per hour with an overtime rate of # times the regular rate$ 1f Antonioworks 43 hours in one week, what are his overtime earnings8

A$ -#/"B$ -#/4C$ -#/3$ -#/.

#5$ 'he column totals in the pa)roll register are =====================$A$ used in the %ournal entr) to record the pa)rollB$ posted directl) to the general ledger accountsC$ neither recorded in a %ournal entr) nor posted to the general ledger accounts$ used to update emplo)ee earnings records

#3$ <ales people who are paid a percentage of net sales are paid on aDnE =============$A$ commission basisB$ salar) basisC$ hourl)rate basis$ piecerate basis

#>$ n Februar) #, "//#, Brock purchased a ")ear insurance polic) for -",/// and paid thefull premium in advance$ 'he insurance e2pense associated with this polic) for "//# isA$ -",///B$ -#,///C$ -#,5//$ less than -"/

#.$ n the financial statements prepared at the end of an accounting period, the endingmerchandise inventor) is shown on ==========================$A$ neither the income statement nor balance sheetB$ the balance sheet but not the income statementC$ the income statement but not the balance sheet$ both the income statement and the balance sheet




#$ n ul) ", "//#, +oeb purchased e(uipment for ->,5//$ epreciation e2pense for "//#,given the straightline method, a 5)ear useful life, and a salvage value of -5// is =====$A$ ->//B$ -#,4//C$ ->5/$ -#,5//

"/$ 'he ad%usting entr) for uncollectible accounts re(uires

ebit CreditA$ Allowance for 9ncollectible Accounts Accounts *eceivableB$ 9ncollectible Accounts :2pense Allowance for 9ncollectible AccountsC$ 9ncollectible Accounts :2pense Accounts *eceivable$ Allowance for 9ncollectible Accounts Accounts Pa)able

"#$ 6hat accounts are affected b) the ad%usting entr) for merchandise inventor)8A$ ;erchandise inventor) and purchases

B$ Purchases and income summar)C$ Accounts receivable and purchases$ ;erchandise inventor) and income summar)

""$ 1f ;aria uses special %ournals, credit sales of merchandise are recorded in ==========$A$ sales %ournalB$ cash pa)ments %ournalC$ purchases %ournal$ cash receipts %ournal

"!$ ;erchandise 1nventor) was sold on account for -3// plus 5$5? sales ta2$ 'he entr)would include

ebit CreditA$ Accounts *eceivable -3!/ <ales -3//

<ales 'a2 Pa)able - !/B$ Accounts *eceivable -3// <ales -5>/

<ales 'a2 Pa)able - !/C$ Accounts *eceivable -3#5 <ales -3//

<ales 'a2 Pa)able - #5$ Accounts *eceivable -3!! <ales -3//

<ales 'a2 Pa)able - !!




"4$ For 0icole to find the amount due from a charge customer, she would refer to the ======$A$ sales %ournalB$ sales account in general ledger C$ accounts receivable subsidiar) ledger

i$ accounts receivable account in general ledger

"5$ 1f <mith had sales of ->5,///, sales returns and allowances of -!,5//, and sales discountsof 5? of sales, <mith&s net sales total would be ==============$A$ -3>,"5/B$ -3>,5//C$ -3>,>5/$ -3.,///

"3$ After Alicia posted all %ournals, the total of accounts receivable ledger balances shoulde(ual ==========================$A$ balance of sales accountB$ total of accounts receivable debit column in sales %ournal

C$ balance of accounts receivable account in general ledger $ cash debit column of cash receipts %ournal

">$ 'he best order for posting special %ournals is which of the following8A$ <ales, Purchases, General, C*, CPB$ Purchases, <ales, General, C*, CPC$ C*, CP, <ales, Purchases, General$ <ales, Purchases, C*, CP, General

".$ Champion&s supplies account shows a balance of -5,54 in the trial balance debit columnof the worksheet and a credit of -!,>/ in the ad%ustments column$ 6hat amount should

be e2tended to what column in the worksheet8A$ -,"5. e2tended to balance sheet debit columnB$ -#,.4/ e2tended to balance sheet debit columnC$ -#,.4/ e2tended to income statement debit column$ -!,>/ e2tended to balance sheet credit column

"$ 6hich account balance is not ad%usted at the end of the accounting period8A$ merchandise inventor)B$ suppliesC$ insurance e2pense$ cash

!/$ 1nformation reported on an income statement includes all of the following e2cept ======$A$ revenueB$ e2pensesC$ cost of merchandise$ all of the above items are included in the income statement




Classify each account listed below as one of the following:

A H Asset+ H +iabilit): H wner&s :(uit)* H *evenueC; H Cost of ;erchandise: H :2penses

Accounts:

#$ ;erchandise 1nventor)

"$ ohn ones, rawing

!$ <ales

4$ Cash

5$ Advertising :2pense

3$ Purchases

>$ Accounts *eceivable

.$ Accounts Pa)able

$ 1ncome <ummar)

#/$ Prepaid 1nsurance




Problem 1: Eight-olumn !or"sheet'he final balances in the general ledger of 6ind) Cit) Graphics esktop Publishing at the end of;arch are listed below$

Cash in bank - #,3/Pett) Cash !//Accounts *eceivableI6end) 6illet 5.#<upplies >5Prepaid 1nsurance #,#//Accounts Pa)ableI<olutions <oftware 45/ack Cameron, Capital !,55/ack Cameron, 6ithdrawals !//1ncome <ummar) esign *evenue !,///Advertising :2pense 5"51nsurance :2pense

;iscellaneous :2pense "5/*ent :2pense #,#//<upplies :2pense 9tilities :2pense 44/

Ad%ustment 1nformation, ;arch !#<upplies 1nventor) - "5/Jalue of Prepaid 1nsurance #,///



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 1,

Account 'itle'rial Balance Ad%ustments 1ncome <tatement Balance <heet

ebit Credit ebit Credit ebit Credit ebit Cred



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 11

Problem +: an" Reconciliation

n ;arch !#, "//", +akeside Computers received a bank statement dated ;arch "., "//"$ 'hefollowing information is obtained from the bank statement and from the records of the business

Bank <tatement$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$-">,#3/$//Bank <ervice Charge$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#/$4/Bank Credit Card Charge$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$!!$./utstanding eposit ;arch "$$$$$$$$$$$$$$$$$$$$$$$$!,#5>$"/utstanding Checks 0o$ "!#$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#,""#$// 0o$ "!"$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$.3/$4/Checkbook Balance on Check <tub "!!$$$$$$$$$".,34/$//

Prepare a bank reconciliation$ 9se ;arch !#, "//", as the date$



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 1+

PR*)E' .

'om and Pat do business as ' @ P Consulting Associates, a general partnership$ n ecember !#,"//#, the partners& capital balances, profit sharing percentages, investments, and drawing balanceswere as follows

Capital Profit <haring ? 1nvestments rawing'om -#,/"/,/// 3/? -#/,/// -"./,///Pat 3./,/// 4/? -5,/// "//,///

Instructions:' @ P Consulting Associates prospered in "//# with a net income of -//,///$ Prepare astatement of owner&s e(uit) on the following page$

9se )our best %udgment in choosing the format for this statement$



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 1.

' @ P Consulting Associates

Partnership :(uit)

ecember !#, "//#

PR*)E'



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 1

From the list of account balances below for Kent, 1nc$, prepare an income statement, statement ofowner&s e(uit), and a balance sheet for the month of une of the current )ear on the forms provided$

All account balances are from the worksheet income statement and balance sheet columns$

Cash$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$- >,//$//Accounts *eceivable$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#,.//$//Prepaid 1nsurance$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$4/$//<upplies$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$>45$//ffice :(uipment$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#/,"//$//Accumulated epreciation L ffice :(uipment$$$$$$$$$$$$!,5//$//Accounts Pa)able$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$",4//$//Capital$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#5,4!/$//rawing$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$",>//$//Consulting *evenue$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$4,.5/$//<upplies :2pense$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$!//$//

<alar) :2pense$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$5/$//*ent :2pense$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$4>5$//epreciation :2pense$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#>/$//



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 10

Kent, 1nc$

1ncome <tatement

For ;onth :nded une !/, "//"

Kent, 1nc$<tatement of wner&s :(uit)

For ;onth :nded une !/, "//"



#$%&A'E%(A) A*$%(I%GS(A(E +,,+PAGE 1

Kent, 1nc$

Balance <heetune !/, "//"

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Accounting 1 Study Guide-review Activity