Questions and Answers of Glencoe Accounting First Year Course

At Ice Cream Express, you keep the financial records and maintain inventory. You noticed that some ice cream flavors are popular only during certain seasons. For example peppermint ice cream is very
The cash receipts journal for the month of January is provided in your working papers and illustrated here. Instructions In your working papers, foot, prove, total, and rule the cash
The Accounts Receivable controlling account in the general ledgera. Shows the total amount owed by all customers when posting is complete.b. Helps keep the general ledger a balancing ledger in which
Your new job assignment is to prove the accounts receivable subsidiary ledger. All postings have been made. What do you do to prove the ledger?
Thinking of boosting your company’s sales by selling products in another country? Consider the impact of tariffs. A tariff, or duty, is a tax imposed on imports of specific products. For example if
Shutterbug Cameras records its transactions in special journals. The accounts receivable subsidiary ledger and certain general ledger accounts are included in your working
A journal amount column that is not headed with an account name is called aa. Special amount column.b. General amount column.c. Date column.d. Posting reference column.e. None of these answers
Compare and contrast the receipt of cash from a charge customer with the receipt of cash at the time of the merchandise sale.
You have learned that businesses have cash receipts in various forms including transactions with charge cards and bankcards; checks; and currency.PERSONAL FINANCE ACTIVITY What do you know about
River’s Edge Canoe & Kayak uses special journals and an accounts receivable subsidiary ledger for recording business transactions. The accounts receivable subsidiary ledger accounts and certain
a. Which sales journal column total is posted to the general ledger Sales account?b. When posting column totals from the cash receipts journal to the general ledger, which total is not posted?
A list of all customer accounts, account balances, and total amount due from all customers is aa. Schedule of Accounts Payable.b. Worksheet.c. Schedule of Accounts Receivable.d. none of the above
In addition to financial results, most annual reports contain management’s analysis and interpretation of the financial data. For example if revenue has increased, the report might provide reasons
Buzz Newsstand had the following sales and cash receipt transactions for May. In your working papers, the accounts receivable subsidiary ledger and general ledger accounts have been opened with
a. What is the purpose of a schedule of accounts receivable?b. The schedule of accounts receivable does not uncover what type of error?
You are an applicant for an accounting clerk position with PETCO and asked to write definitions for these terms. Make sure you connect your knowledge of these account ing terms to the financial
What is the value of maintaining special journals?
A listing of vendor accounts, account balances, and total amount due all vendors is aa. Schedule of accounts payable.b. Schedule of accounts receivable.c. Schedule of vendors.d. Schedule of creditors.
Describe the purpose of the purchases and the cash payments journals.
Books & More sells hardcover and paperback books, music tapes, and CDs. It keeps a large stock of merchandise and orders new products often. The store may place an order for fast-selling items,
As the owner of a sporting goods store, you manage the accounting records. Your delivery van has been in the shop for repairs and you need it back as soon as possible. The mechanic calls with the
The Design Den, a retail merchandising business, uses special journals. On page 3 of the purchases journal in the working papers, record the following purchases: Date Transactions Feb. 1
Thomas Sampson is a purchasing agent for Complete Offices. He gave you an envelope full of receipts from a 10-day business trip without any explanations. Write a memo asking Thomas to identify which
Web Works is an online computer assistance service specializing in applications accessible through the Internet. In a recent staff meeting, Shelly Lazarus, your manager, asked you to assess online
Apple Tree Boutique uses special journals. On September 30 the total of the Cash in Bank Debit column of the cash receipts journal is $18,750.12. The total of the Cash in Bank Credit column of the
You are instructed to prepare a schedule of accounts payable and prove its accuracy. How do you perform the task?
If your company has resources, products, or skills that are valuable, unique, or difficult to imitate globally, it has an international competitive advantage. For example Wal-Mart has developed its
The Country Peddler, which is a retail merchandising business, had the following transaction that occurred on November 2. Instructions Analyze Check Stub 104 that is shown here. In your working
Explain why the purchase of supplies is not recorded in the special columns of the purchases journal, store equipment is not recorded in the journal’s Purchases Debit column, and the General Debit
If you are working, you know that your employer withholds federal income tax from your earnings each payday as required by law. You may also be required to file a federal tax return each year, either
Denardo’s Country Store pays its employees on a biweekly basis. This week the payroll is $2,000. You issued Check 949 for $1,487 in payment of the payroll less the following amounts: Employees’
Just for You Shoes purchased shoes for its two retail locations. The mall store ordered 20 pairs at $29.90/pair and 40 pairs at $18.50/pair. The downtown store ordered 35 pairs at $29.90/pair and 24
Your accounting supervisor asks you to prepare a cash proof for the month. What accounting documents do you need? What steps will you perform?
To increase profits, corporations must increase sales or decrease costs. They share information about both in their annual reports. PETsMART’s annual report has a section labeled Management’s
Sunset Surfwear had the following purchases transactions for the month of July. Instructions Use the purchases journal in your working papers.1. Record each of the following transactions on
Shutterbug Cameras, a retail merchandising business, had the following purchases on account for the month of July. In the working papers, the beginning balances in the accounts are opened for
Explain why it is important to prove cash.
River’s Edge Canoe & Kayak is a retail merchandising business located in Jackson Hole, Wyoming. The beginning balances of the accounts needed to complete this problem are opened in your working
Buzz Newsstand had the following purchases and cash payment transactions for July. The balance in the accounts payable subsidiary ledger and general ledger accounts are opened in the working
Ely Corporation, a custom furniture manufacturer, has a general ledger account balance of $73,395 for Merchandise Inventory as of July 1. On the following June 30, the end of the fiscal period, Ely
As the accounting manager for several Homemade Fresh Ice Cream stores in your region, you oversee the preparation of endof-period financial statements. Before you complete your end-of-period
Which of the following statements is incorrect concerning an adjusted trial balance?a. An adjusted trial balance lists account balances and their locations in the ledger.b. An adjusted trial balance
You are an accountant for EZ Training Systems. The company CEO has asked you to prepare financial statements without the appropriate adjusting entries.INSTRUCTIONS Analyze this information for
What is the term for the actual counting of merchandise on hand and available for sale at the end of the fiscal period?
The local bakery where you work as an accounting clerk does not sell its day-old baked goods but allows employees to have them. One day a mother with three children who cannot afford fresh donuts
You are preparing a presentation for the board of directors of Kids-n-Teens. As you review the quarterly financial statements, you see that the new clerk extended the account balances from the
Information related to accounts requiring adjustment on the work sheet for the year ended December 31 for Star City Resorts Corporation follows. Indicate in your working papers the amount of each
A store purchased a one-year insurance policy for $1,800 on September 1. Its fiscal period ended December 31. What is the amount of the adjustment and what accounts are debited and credited on
Explain what expensing an asset means.
You have just been promoted to Accounting Director for a national toy store chain. In reviewing the end-of-period financial reports, you see that net income was lower than in past periods. You
Refer to Figure 18–5 and answer the following questions in your working papers:1. What amount is extended to the Income Statement section for Federal Corporate Income Tax Expense?2. To which
a. Why must some general ledger accounts be updated at the end of the period?b. What is the step to follow after adjusting entries have been recorded in the general journal?
The Income Summary amount in a work sheet’s Adjustments Debit column represents thea. Decrease in Merchandise Inventory.b. Increase in Merchandise Inventory.c. Beginning Merchandise Inventory.d.
Compute the adjustment for Supplies if the business had $3,000 in supplies at the beginning of the period, bought $4,000 during the period, and estimated that it had used 60% of all supplies during
If your money does not go as far as it used to, the cause is probably inflation. When there is a general increase in the cost of goods and services, inflation exists. Countries use different methods
Answer these questions, based on the debit memorandum shown here.1. Which company is returning the merchandise?2. How many items are being returned?3. What amount is entered in the journal entry?4.
The ending balance of the Supplies account appearsa. In the Trial Balance columns of the work sheet.b. In the Balance Sheet columns of the work sheet.c. In the Income Statement columns of the work
Compare the Federal Corporate Income Tax Expense account with the Federal Corporate Income Tax Payable account. How are they different?
You have just hired Geoffrey Hillman to be the accounting clerk for the Hats Off Corporation, a merchandiser of hats, caps, and scarves. Geoffrey has worked as a payroll clerk, but not in sales or
If the merchandise is purchased for $1,000 on August 1, with terms of sale of 2/10, n/30, the amount due to the vendor on August 9 isa. $1,000.b. $990.c. $980.d. $20.
Define merchandising business.
Felix Andersen is a film buff. His business, Video Source, specializes in foreign titles and classic film collections. Video Source uses a manual accounting system. Sales are recorded from cash
When you operate a business, you must constantly evaluate the effective use of resources, including time, money, materials, space, and staff. You own Retro Café, a late-night spot for young
The journal entry for a cash receipt on account isa. Debit Cash; credit Accounts Receivable.b. Debit Cash; credit Accounts Payable.c. Debit Accounts Payable; credit Cash.d. Debit Accounts Payable;
Explain how a purchase made with a store credit card is different from a purchase made with a bank credit card.
The international product life cycle (IPLC) theory explains how a product that is an export eventually becomes an import. At first sales are strong when a U.S. company sells to both U.S. and foreign
When a customer is given a price reduction on an item (for example, a damaged item), the bookkeeper will use which one of the following accounts?a. Purchase Allowanceb. Purchase Discountc. Sales
A sales slip shows that $1,500 in merchandise has been sold and the sales tax rate is 4%. Compute the cash receipt.
Businesses plan ahead, estimating their revenue and expenses. It is important for you to plan ahead and spend your money wisely. This is accomplished by developing a budget, which is a plan for
Commerce Technology, a computer equipment retailer, had the following selected transactions in March. Instructions Record each transaction on page 4 of the general journal in your working
To decrease the Sales Returns and Allowances account, the bookkeeper willa. Credit the account.b. Debit the account.c. Both debit and credit the account.d. Use the Purchase Returns and Allowances
How are a bank credit card and a debit card similar? How are they different?
Public corporations publish annual reports giving financial and other information they want to make public. One item in most annual reports is a letter from the company’s top executive
Sunset Surfwear, a California-based merchandising store, had the following sales and cash receipt transactions for January. The partial chart of accounts for Sunset Surfwear
When bankcard sales are entered in the general journal, what account is debited?a. Bankcard Salesb. Cashc. Bankcard Sales Expensed. Sales
Your accounting supervisor has instructed you to verify the accuracy of the day’s bank credit card sales and then deposit that amount into the business checking account. Summarize what you need to
The January transactions for InBeat CD Shop are recorded on page 15 of the general journal. InstructionsPost the transactions to the general ledger and subsidiary ledger in your working
Shutterbug Cameras had the following transactions during January. The partial chart of accounts for Shutterbug is shown here. Instructions Record the transactions on page 5 of the general
Evaluate the practice of using a contra account to record sales returns and allowances.
River’s Edge Canoe & Kayak is a merchandising business in Wyoming. The partial chart of accounts follows: Instructions Record January transactions on page 10 of the general
Buzz Newsstand had the following transactions for the month of January. Instructions1. Record the transactions on page 9 of the general journal.2. Post each transaction to the appropriate
Analyze the purchase order shown here and answer the following questions in your working papers.1. What company ordered the merchandise?2. What company was asked to supply the merchandise?3. What is
Work with a partner to pair these terms. Discuss the relationship between the terms. Is one the result of another? Are they opposite? Once you agree, write out your explanation for each pair.
If bankcard fees are automatically deducted from the checking account of a business, how will the bookkeeper journalize the fee?a. Capital account is increased by the amount of the fee.b. Cash
What is a purchases discount?
The Sports Loft is a retail store that sells sports clothing, accessories, and equipment. Janet Loftis wants you to design a more automated system for ordering merchandise that will free her for
Manufacturers make purchases to conduct their business. Imagine that you work in the purchasing department of a large toy manufacturer like Mattel. Your job is to place orders for the parts used to
A business transaction that involves a purchase on account is considered to be a(n)a. Cash transaction.b. Credit transaction.c. Investment of the owner.d. Expense transaction.
How do a purchase requisition and a purchase order differ?
Identifying trends, predicting changes, finding problems, and applying solutions are skills of a systems thinker.ON THE JOB Your town is hosting a big mountain bike competition. As an Action
As an accounting intern for Kaleidoscope Comics, you perform a variety of accounting tasks. The accountant hands you this debit memo. Instructions1. Analyze the source document. Determine which
A liability resulting from the purchase of goods or services on credit is usually recorded asa. An account receivable.b. An account payable.c. A revenue.d. A reduction of equity.e. A net loss.
In your job in the receiving department of a business, you are responsible for verifying the accuracy of a shipment. What do you do?
When Schlumberger Oilfield Services needed supplies for its global operations, it used an e-procurement system to connect buyers and suppliers via the Internet. Bidders around the world can compete
Meadow Link Golf Club had the following cash payment transactions.Instructions Record the following transactions on page 6 of the general journal in your working papers. Date Transactions May 1
If an invoice dated September 9 and received on September 12 shows terms of 2/10 n/30, what is the last day that a discount may be taken?a. September 11b. September 19c. September 22d. October 9
How are a purchases return and a purchases allowance similar? How are they different?
You may soon apply for a loan from a financial institution to pay for your education or to buy a vehicle. When you borrow money, you must understand the loan’s finance charges and what the
Sunset Surfwear frequently purchases merchandise on account. When it receives invoices, a clerk puts a processing stamp on the invoice indicating the due date, the amount of any discount, and the
InBeat CD Shop had the following transactions in March. Instructions Use the T accounts in your working papers. For each transaction:1. Determine which accounts are affected.2. Enter the

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