Accounting I Review Spring

Net Income increases a corporation's total stockholders' equity.

A corporation can decide if an when to declare a dividend.

An entry recorded in a general journal will increase the account debited and decrease the account credited.

A general journal entry posted to Accounts Payable will also be posted to an accounts payable account.

In a computerized accounting system, transactions recorded on a general journal are posted at the end of the month.

Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government.

The larger the number of withholding allowances claimed, the larger the amount of income tax withheld.

Federal unemployment insurance laws require that employers and employees pay taxes for unemployment compensation.

The allowance method of accounting for uncollectible accounts does not comply with the generally accepted accounting principles.

A note provides a business with legal evidence of a debt in the event it becomes necessary to go to court to collect.

The accounting concept Neutrality is applied when the process of making accounting estimates is free from bias.

The expense of an uncollectible account should be recorded in the accounting period that the account becomes uncollectible.

The value of the insurance coverage used is recorded as a debit to Insurance Expense.

For a business using the periodic inventory method, the balance of Merchandise Inventory in the unadjusted trial balance represents the beginning balance plus all purchases of merchandise made in the fiscal period.

Cash and other assets expected to be exchanged for cash or consumed within a year are called liquid assets.