Basic Bookkeeping-3

In periods of rising prices,the FIFO inventory valuation method results in the highest net income.
1. True
2. False
The cost of the most recent (latest) merchandise purchased is assigned to ending inventory when a company uses the LIFO method.
1. True
2. False
During periods of changing prices, a more realistic matching of revenues and expenses results from the use of the LIFO method.
1. True
2. False
The use of the LIFO method of inventory valuation results in the lowest reported net income in a time of rising prices.
1. True
2. False
Unearned Income is a liability account.
1. True
2. False
Accrued income is income that has been earned but not received.
1. True
2. False
The cost of land is not depreciated.
1. True
2. False
Accumulated Depreciation is classified as a contra liability account.
1. True
2. False
The book value of an asset is the market value of the asset.
1. True
2. False
The direct charge-off method of recording losses from uncollectible accounts is an application of the matching principle.
1. True
2. False
Which of the following accounts is not an asset account ?
1. Owner's Capital
2. Cash
3. Land
4. Accounts Receivable
Which of the following accounts is a liability account ?
1. Notes Payable
2. Buildings
3. Owner's Capital
4. Sales
Which of the following appears on a balance sheet ?
1. Merchandise Inventory
2. Sales
3. Cost Of Goods Sold
4. Salaries and Wages
The Income Statement is also called -
1. Profit and Loss Statement
2. Cash Statement
3. Statement of Financial Position
4. Capital Statement
Which of the following is defined as the gross increase in equity resulting from business operations.
1. Revenue
2. Expense
3. Gross Profit
4. Gross Margin
Which of the following is classified as a current asset ?
1. Inventory
2. Land
3. Equipment
4. Patents
Which of the following is a representation of the accounting equation ?
1. All of the answers are representations
2. Assets = Liabilities + Owner's Equity
3. Assets - Liabilities = Owner's Equity
4. Assets - Owner's Equity = Liabilities
The term double entry bookkeeping means -
1. Recording a debit and credit for each transaction.
2. Recording a transaction in two accounting journals.
3. Recording a transaction in two ledgers.
4. Recording a transaction twice to ensure its accuracy.
A General Ledger is used to -
1. Summarize account balances.
2. Initially record transactions.
3. Prepare footnotes to the financial statements.
4. Prepare Customer and Supplier Ageing Reports
Normally, a General Ledger is organized in the following order -
1. Assets - Liabilities - Capital - Revenues - Expenses
2. Revenues - Expenses - Assets - Liabilities - Capital
3. Capital - Liabilities - Assets - Revenues - Expenses
4. Assets - Capital - Revenue - Liabilities - Expenses

Basic Bookkeeping-3

Quiz