Adjusting Entries and General Ledger Accounts Quiz

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What are journal entries recorded to update general ledger accounts at the end of a fiscal period called?

Adjusting entries (correct)

Closing entries

Cash receipts journal

Capital stock

What is the difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts, called?

Cash short

Cash discount

Cash over

Book value of accounts receivable (correct)

What is the use of ethics in making business decisions called?

Business ethics (correct)

Capital stock

Cash sale

Capital

What is the account used to summarize the owner's equity in a business called?

Capital (A) Signup and view all the answers

What is the total shares of ownership in a corporation called?

Capital stock (A) Signup and view all the answers

What is a statement that guides the ethical behavior of a company and its employees called?

Code of conduct (B) Signup and view all the answers

What is the purpose of a debit memorandum?

To notify a depositor of a decrease in their account balance due to a debit transaction (D) Signup and view all the answers

Which of the following is a financial ratio that compares a company's total debt to its total assets?

Debt ratio (C) Signup and view all the answers

What is the purpose of a commercial invoice?

To provide a detailed listing and description of merchandise sold, including prices and terms (A) Signup and view all the answers

What is the purpose of a debit card?

To make electronic transactions by debiting funds from a bank account (A) Signup and view all the answers

What is the definition of a debtor?

A person or entity that owes money to another party (A) Signup and view all the answers

What is the definition of a debit?

An entry on the left side of an account, indicating an increase in assets or a decrease in liabilities or owner's equity (C) Signup and view all the answers

What is a restrictive endorsement on a negotiable instrument?

An endorsement that limits the further negotiation or transfer of the instrument to a specific individual or purpose (B) Signup and view all the answers

What is a retail merchandising business?

A business that sells goods directly to consumers for personal use or consumption, typically through retail stores or online channels (C) Signup and view all the answers

What are retained earnings?

The portion of a corporation's net income that is retained and reinvested in the business rather than distributed as dividends to shareholders (A) Signup and view all the answers

What is revenue?

The total income generated from the sale of goods or services during a specific period, contributing to the increase in the owner's equity of a business (A) Signup and view all the answers

What is a reversing entry?

An accounting entry made at the beginning of a new accounting period to reverse the effects of certain adjusting entries made in the previous period (A) Signup and view all the answers

What is a salary?

Compensation paid to employees for the services they provide to an organization, typically on a regular basis and expressed as a fixed annual or monthly amount (C) Signup and view all the answers

What is the primary purpose of a sales invoice?

To detail the goods or services sold, quantity, price, and payment due date (D) Signup and view all the answers

Which of the following is a special journal used to record sales transactions?

Sales journal (B) Signup and view all the answers

What is the purpose of a sales discount?

To offer an incentive for prompt payment or bulk purchases (D) Signup and view all the answers

What is the purpose of a schedule of accounts receivable?

To provide a detailed listing of all customer accounts and balances (D) Signup and view all the answers

What is the primary purpose of a sales return?

To process the return of previously purchased goods or services (D) Signup and view all the answers

What is the purpose of a schedule of accounts payable?

To provide a detailed listing of all vendor accounts and balances (D) Signup and view all the answers

What does the term 'scrap value' represent for a depreciable asset?

The expected residual value at the end of its useful life (B) Signup and view all the answers

What is a sight draft primarily used for in commercial transactions?

To facilitate prompt payment (C) Signup and view all the answers

In what type of business are intangible services provided to customers?

Service business (A) Signup and view all the answers

What is the purpose of a special amount column in accounting records?

To track amounts for a specific account (D) Signup and view all the answers

What does a share of stock represent in a corporation?

A unit of ownership in the corporation (C) Signup and view all the answers

Why is social security tax levied on employees and employers?

To fund the Social Security program benefits (C) Signup and view all the answers