Accounting Final Exam Study Sheet Multiple Choice 1. Statement showing financial position of a business or person set up in the form of the fundamental equation A= L+ OE. 2. Assets are generally listed in order of liquidity or show how easy it is to convert the asset to cash. 3. Temporary accounts are drawing revenues expenses. 4. Asset categories current vs fixed:
Current

Fixed

Current are cash and bank accounts if
Fixed meaning buildings, furniture, already cash and acc it’s easily converted equipment, and automobiles. to cash.

5. Definition of Closing Entries : Journal entries that close off accounts for an accounting period, accounts are related to income + expenses of a business + used to track information for a specific period of time. They combine all drawings, revenues, expenses and put the net value in brackets. The capital account is for the start of the next accounting period. 6. HST on sale of goods or services is a credit to HST PAYABLE. 7. Types of Contra Accounts:
Sales Return, Sales Account, Purchase Returns, Purchase Discounts, and Allowance for doubtful accounts receivable. 8. Definition of an Income Summary Account: is a temporary account used to store income statement account if balances revenue + expense accounts during closing entry step accounting cycle. 9. Definition of Dollar Sign: Dollar sign is usually only used in the trial balance + financial statements. A dollar sign is chosen only for the first item in the column and for detail of that column. 10. A single line is placed under the column of figures to be added or subtracted. The total amount is double lined to indicate the final total.

11. Calculating Amortization: this is similar to depreciation in that both are a form of a write off, amortization refers exclusively to intangible assets (company goods, research and development). Calculating Amortization is depreciation of office equipment. furniture, and automobiles. 12. Current Ratio is the relationship of current assets to current liabilities. (Current Assets/
Current liabilities = Current Ratio) It is the dollars available in current assets to pay each dollar of current liabilities. 13. Vertical Analysis presents all of the income statement amounts as a percentage of net sales. 14. Adjustment for supplies: (Balance supplies $1500, in an actual account there is only $900 and an adjusting entry for $600 would be made.) Supplies is Credited and supplies expense is debited. 15. How to remit HST: Balance of HST account ­ balance of HST recoverable remit the difference ($4500 ­ $2000 = $2500 remitted) 16. Calculation of A = L + OE : Assets on left side, liabilities and owner's equity on right side, in the end both sides should balance. 17. Adjustment for insurance: Adjustment for insurance must be made before financial statements are done if monthly or quarterly. 18. Purchase of office supplies with HST: Debit office supplies, debit HST PAYABLE, credit bank account or account payable if on account. 19. General journal entry includes date of transaction, title of accounts debited and credited, amount of each debit and credit, and an explanation of the transaction. 20. Definition of a Income Statement: Financial statement that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how a business incurs its revenues and expenses through both operational and non­operating activities. 21. Purpose of chart of accounts: for a business to organize their finances and separate expenditures revenue, assets, and liabilities to get a clear picture of the financial standing of the company it contains account names and numbers.

True or False

1. Balance Sheet Preparation: Usually prepared at the end of an accounting period month end, quarterly or year end. Current assets most used are cash,