Question 1

To close the Sales account,

Accepted Answer

To close the Sales account, you debit Sales to decrease it and credit Income Summary to transfer the sales revenue into the Income Summary account as part of the process to close out revenue and expense accounts at the end of an accounting period.

Question 2

To rate the ability of a business to pay its current and long-term liabilities, investors use

Accepted Answer

Liquidity ratios measure a company's ability to pay its current and long-term liabilities.

Question 3

A company estimates that $4,000 of its $50,000 accounts receivable will become uncollectible. The current balance in Allowance for Uncollectible Accounts is a $300 debit. The adjusting entry will include a

Accepted Answer

The answer of A company estimates that $4,000 of its...

Question 4

After closing entries have been posted, the accounts that remain open are the

Accepted Answer

After closing entries are posted, the accounts that remain open are the balance sheet accounts, which include asset, liability, capital stock, and retained earnings accounts. Expense, revenue, and dividends accounts are closed to prepare the books for the next accounting period.

Question 5

A system provided by the federal government for making federal tax deposits is the

Accepted Answer

The Electronic Federal Tax Payment System (EFTPS) is the system provided by the federal government for making federal tax deposits. It allows taxpayers to make payments electronically online or by phone.

Question 6

Select the one term that best fits each definition
-The amount of total current assets less total current liabilities.

Accepted Answer

Working capital is defined as the amount of total current assets less total current liabilities. It is a measure of a company's short-term liquidity and its ability to cover its short-term obligations.

Question 7

Select the one term that best fits each definition
-A federal tax paid for hospital insurance.

Accepted Answer

Medicare tax is a federal tax paid for hospital insurance, which is part of the payroll taxes deducted from employees' wages.

Question 8

Select the one term that best fits each definition
-The subsidiary ledger containing vendor accounts.

Accepted Answer

The accounts payable ledger is a subsidiary ledger that contains individual vendor accounts, tracking the amounts owed to each supplier.

Question 9

Select the one term that best fits each definition
-The operating revenue remaining after cost of merchandise sold has been deducted.

Accepted Answer

Gross profit is the operating revenue left after deducting the cost of merchandise sold.

Question 10

Select the one term that best fits each definition
-An account in a general ledger that summarizes all accounts in a subsidiary ledger.

Accepted Answer

A controlling account is used in the general ledger to summarize the total balances of all accounts in a subsidiary ledger, providing a way to consolidate information for financial reporting and analysis.

Question 11

Select the one term that best fits each definition
-A ratio that measures the relationship of quick assets to current liabilities.

Accepted Answer

The quick ratio, also known as the acid-test ratio, specifically measures a company's ability to meet its short-term obligations with its most liquid assets, thus fitting the definition provided.

Question 12

Select the one term that best fits each definition
-A comparison of one item on a financial statement with the same item on a previous period's financial statement.

Accepted Answer

Horizontal analysis involves comparing financial statement items over different periods to identify trends or changes.

Question 13

Select the one term that best fits each definition
-An accounting form that summarizes the earnings, deductions, and net pay of all employees for one pay period.

Accepted Answer

A payroll register is an accounting document that summarizes the wages, deductions, and net pay of all employees for a specific pay period.

Question 14

Select the one term that best fits each definition
-Total liabilities divided by total assets.

Accepted Answer

The debt ratio is a financial ratio that compares a company's total liabilities to its total assets, effectively measuring the proportion of a company's assets that are financed by debt.

Question 15

Select the one term that best fits each definition
-The original price of all merchandise sold during a fiscal period.

Accepted Answer

The term "cost of merchandise sold" refers to the original price of all merchandise that was sold during a fiscal period. It represents the direct costs attributable to the production of the goods sold by a company.

Question 16

Select the one term that best fits each definition
-Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's account payable to the vendor.

Accepted Answer

A purchases allowance occurs when a buyer is dissatisfied with goods received but does not return them, leading to a reduction in the amount owed to the seller.

Question 17

Select the one term that best fits each definition
-A deduction from total earnings for each person legally supported by a taxpayer, including the employee.

Accepted Answer

A withholding allowance is an exemption that reduces how much income tax an employer deducts from an employee's paycheck. It accounts for the taxpayer and their dependents.

Question 18

Select the one term that best fits each definition
-The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts.

Accepted Answer

The book value of accounts receivable is calculated by subtracting the balance of the Allowance for Uncollectible Accounts (a contra account) from the balance of Accounts Receivable. This gives the net amount expected to be collected.

Question 19

Select the one term that best fits each definition
-A report prepared to give details about an item on a principal financial statement.

Accepted Answer

A supporting schedule is a detailed report prepared to provide additional context or information about a specific line item on the main financial statements, fitting the definition provided.

Question 20

Select the one term that best fits each definition
-A ledger that is summarized in a single general ledger account.

Accepted Answer

A subsidiary ledger is a ledger that is summarized in a single general ledger account.

Quiz 26: Merchandising Business As a Corporation

To close the Sales account,

To rate the ability of a business to pay its current and long-term liabilities, investors use

A company estimates that $4,000 of its $50,000 accounts receivable will become uncollectible. The current balance in Allowance for Uncollectible Accounts is a $300 debit. The adjusting entry will include a

After closing entries have been posted, the accounts that remain open are the

A system provided by the federal government for making federal tax deposits is the

Select the one term that best fits each definition -The amount of total current assets less total current liabilities.

Select the one term that best fits each definition -A federal tax paid for hospital insurance.

Select the one term that best fits each definition -The subsidiary ledger containing vendor accounts.

Select the one term that best fits each definition -The operating revenue remaining after cost of merchandise sold has been deducted.

Select the one term that best fits each definition -An account in a general ledger that summarizes all accounts in a subsidiary ledger.

Select the one term that best fits each definition -A ratio that measures the relationship of quick assets to current liabilities.

Select the one term that best fits each definition -A comparison of one item on a financial statement with the same item on a previous period's financial statement.

Select the one term that best fits each definition -An accounting form that summarizes the earnings, deductions, and net pay of all employees for one pay period.

Select the one term that best fits each definition -Total liabilities divided by total assets.

Select the one term that best fits each definition -The original price of all merchandise sold during a fiscal period.

Select the one term that best fits each definition -Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's account payable to the vendor.

Select the one term that best fits each definition -A deduction from total earnings for each person legally supported by a taxpayer, including the employee.

Select the one term that best fits each definition -The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts.

Select the one term that best fits each definition -A report prepared to give details about an item on a principal financial statement.

Select the one term that best fits each definition -A ledger that is summarized in a single general ledger account.