L"l
I
ACCOUNTING
Overview
This event
The accuratekeepingof financialrecordsis an ongoingactivityin alltypesof businesses.
providesrecognition
for FBLAmemberswho havean understanding
of and skillin basicaccounting
principlesand procedures.Studentswho havecompletedmore than one year of accountinginstruction
are not eligible.
Competencies
listingfirst the most importantcontentareasof the tests.
The topicsiistedbeloware prioritized,
.
.
.
r
.
.
.
o
Basicpracticesof accountingfor the
partnership,
soleproprietorship,
and
corporation
Typesof ownership
Basicaccounting
cycle
Terminology
Accountclassification
Journalizing
posting
lncomestatement
.
r
.
.
.
.
.
Balancesheet
Worksheet
Bankreconciliation
payroll
Depreciation,
repairs,improvements
Manualand computerized
accounting
software
Ethicalstandards
Procedures/Tips
.
Reviewthe CompetitiveEventsTips in the front of the book.
Web Site Resources
r http://nysscpa.org/prof_library/guide.html
. http://accounting.ucdavis.edu/refs/glossary.cfm
?list=alpha&alpha=a
. http://wvwv.dmacc.edu/instructors/taprindle/welcome_files/301/solutions/smch03.pdf
. http://vwwv.quickm
ba.com/accounting/
FBLA CompetitiveEventsSfudy Guide 2008-2010
Accounting I SampleQuestions
1. Whichof the followingentriesrecordsthe receiptof a utilitybillfrom the watercompany?
a. DebitUtilitiesExpense;creditAccountsPayable
b. DebitAccountsPayable;creditUtilitiesPayable
c. DebitAccountsPayable;creditCash
Payable;creditAccountsReceivable
d. DebitUtilities
on
2. Usinga perpetualinventorysystem,the entryto recordthe purchaseof $30,000of merchandise
accountwouldincludea
Inventory.
a. creditto Merchandise
b. debitto Sales
Inventory.
c. debitto Merchandise
d. creditto Sales.
3. A trialbalanceis preparedto:
intothejournal
transactions
a. provethattherewere no errorsmadein recording
prepare
financial
statements
help
account
balances
to
the
b. summarize
c. provethat no errorswere made in postingto the ledger
d. orovethat each accountbalanceis correct
Whichof the following
overstated.
inventory
at the end of the yearwas inadvertently
4. Merchandise
statementscorrectlystatesthe effectof the erroron net income,assets,and owner'sequity?
a. net incomeis overstated,assetsare overstated,owner'sequityis overstated
owner'sequityis overstated
assetsare understated,
b. net incomeis understated,
owner'sequityis understated
assets
are
understated,
c. net incomeis understated,
d. net incomeis overstated,assetsare overstated,owner'sequityis understated
are debitedto the account
of merchandise
system,all purchases
5. Underthe perpetualinventory
entitled
Sold.
a. Costof Merchandise
Available
for Sale.
b. Costof Merchandise
Inventorv.
c. Merchandise
d. Purchases.
involving
cashreceiptsor increasesis the
6. A specialjournalusedto recordall transactions
journal.
a. purchases
journal.
b. cashreceipts
c. cashpaymentsjournal.
d. salesjournal.
7. Whichaccountwouldnormallynot requirean adjustingentry"
Depreciation
a. Accumulated
b. WagesExpense
c. Smith,Capital
d. AccountsReceivable
wiih a costof $80,000,an estimatedresidualvalueof $5,000,and an estimatedlifeof
B. Equipment
it was
yearswas depreciated
methodfor 5 years.Due to obsolescence,
by the straight-line
thatthe usefullifeshouldbe shortenedby 5 yearsand the residualvaluechangedto
determined
expensefor the currentand futureyearsis:
zero.The depreciation
a. $ 5,000
b. $10.000
c. $11,000
d. s 5.500
FBLA CompetitiveEvenfs Sfudy Guide 2008-2010
'15
a miningsitefor $500,000on July 1, 2005.The companyexpectsto
9. The WeberCompanypurchased
'100,000tons will be recovered.The
years
for
next
10
and
anticipatesthat a totalof
mineore
the
estimatedresidualvalueof the propertyis $80,000.During2005the companyextracted6,000tonsof
ore.The depletionexpensefor 2005 is:
a. $25,200
b. $42,000
c. $12,600
d. $50,000
increaseby $5,000,then
10. Overa periodof time,if totalassetsincreaseby $20,000and totalliabilities
owner'sequitywill be increasedby:
a. $25,000
b. $20,000
c. S 5.000
d. $15,000
1 1 . A d j u s t i negn t r i e s
a. affectsboth incomestatementand balancesheetaccounts.
b. affectsonly balancesheetaccounts.
c. affectsonly incomestateaccounts.
d. affectsonly cashflow statementaccounts.
A summaryof selectedledger accountsappearsbelow for Ted'sAuto Servicesfor the 2005 calendar
lncome Summary
Ted, Drawing
Ted, Capital
12/3115,00012/3132,000
6/30 2,000 12/31 7,000
12/317,0001/1 5,000
11/305,000
12/3117,000
12/3117,000
12. Net incomefor the periodis:
a. $17,000
b. $15,000
c. $22,000
d. $ 7,000
s a l a r y o$f l 0 , 0 0 0 p l u s a 5 p e r c e n t c o m m i s s i o n osnaal e
1 3 .J u n e r e c e i v e s a n a n n u
l ls d u r i n g t h e y e a r
in excessof $125,000.Her salesfor the yeartotal$235,000.Her totalearningsamountto:
a. $26,250
b. $25,500
c. $20,000
d. $31,750
is available
for the DeedsTravelAgency:
14. The followinginformation
Totalrevenues. . . . . . . .$125,000
Totalexpenses.. . . . . . . $ 60,000
J. T. Deeds,Capital. . . . $ 80,000
J. T. Deeds,Withdrawals
$ 15,000
whatwill be the balancein the J. T. Deeds,Capital
Aftertheseclosingentriesare completed,
account?
a. $ 65,000
b. s 80.000
c. S130.000
d. $145.000
FBLA CompetitiveEvenfs Sfudy Guide 2008-2010
'15. A companypurchaseda new truck at a cost of
$42,000on July 1, 2005.The truckis estimatedto
havea usefullifeof 6 yearsand a salvagevalueof $3,000.Usingthe straight-line
method,how much
depreciation
expenseswill be recordedfor the truckfor the year endedDecember31,2005?
a. $3,500
b. $7,000
c. $4,000
d. $3,250
1 6 .O n N o v e m b e r l , K i m C o m p a n y a c c e p t e d a 3 - m o n t h n o t e r e c e i v a b l e a s p a y m e n t f o r s e r v i c e s
providedto Chu Company.The termsof the notewere $8,000face value and 6ohinterest.Kim
Companyclosesits bookson December3'1and does not use reversing
entries.On February1, the
journalentryto recordthe collection
of the noteshouldincludea creditto
a. NotesReceivable
for $8.120.
for $120.
b. InterestReceivable
c. InterestRevenuefor $40.
d. InterestRevenuefor $120.
17. A 60-day,1O%notefor $8,000,datedApril'15,is receivedfrom a customeron account.The face
valueof the noteis
a. $7,200.
b. $8,800.
c. $8,600.
d. $8,000.
1 8 . T h e e n t r y t o j o u r n a l i z e p a y i n g a s e m i m o n t h l ylpeas ys rdoel d
l uctionsforemployeeincometax,social
securityand Medicaretax,and U.S.SavingsBondsis a creditto Cashand the liability
accountsand
a debitto
a. salaryexpense.
b. cash.
c. unemployment
tax payable-federal.
d. payrolltaxesexpense.
1 9 . T h e s t a t e c h a r t e r a l l o w s a c o r p o r a t i o n t o i s s u e o n l y a c e r t a i n nsuhma br eesr oef a c h c l a s s osf t o c k .
Thisamountof stockis called
a. issuedstock.
b. authorized
stock.
c. treasurystock.
d. outstanding
stock.
20. What is the totalstockholders'equity
basedon the followingaccountbalances?
a. $510,000
b. $540,000
c. $550,000
d. $s30.000
21. AccountsPayablewouldappearas a debitin
a. the Salesjournal.
journal.
b. the Purchases
c. the CashReceiptsjournal.
d. the CashPaymentsjournal.
22. The independent
auditor'sreportdoeswhichof the following?
a. givesthe auditor'sopinionregardingthe fairnessof the financialstatements
whatthe auditordid
b. summarizes
c. statesthat the financialstatementsare truthful
whichfinancialstatements
d. describes
are coveredbv the audit
FBLA CompetitiveEvents S/udy Guide 2008-2010
10
23. Whichof the followingis not an assetaccount?
a. Sales
b. Cash
c. Supplies
d. OfficeEquipment
and normalbalanceof J. Schuyler,Drawing?
24. Whichof the followingdescribesthe classification
a. Owner'sEquity,debit
b. Expense,debit
credit
c. Liability,
d. Asset,debit
25. lf a parcelof landis offeredfor saleat $150,000,is assessedfor tax purposesat $95,000,is
for $137,000,the land
recognized
by its purchasers
as easilybeingworth$140,000,and is purchased
shouldbe recordedin the ourchaser'sbooksat
a. $138,500.
b. $'150,000.
c. $ 95,000.
d. $137.000.
26. Saleslesssalesdiscountslesssalesreturnsand allowances
eouals
a. net ourchases.
b. costof goodssold.
c. net income.
d. net sales.
27. The financialstatementthat reportswhetherthe businessearneda profitand alsoliststhe typesand
amountsof the revenuesand exoensesis called
a. a statementof cash flows.
b. an incomestatement.
c. a balancesheet.
d. a statementof owner'sequity.
28. WelchCompany'sbankstatementshowsthata notereceivable
of $10,000and interestof $800were
collectedbythe bankon behalfof the depositor.
The entryrequiredon the company'sbooksis:
a. debitCash,debitInterestExpense,creditNotesReceivable
b. debitCash,creditNotesReceivable
c. debitCash,creditInterestIncome,creditNotesReceivable
d. debitCash,debitInterestIncome,creditNotesReceivable
29. A checkissuedto a creditorin the amountof $53 was recordedin thejournalas $530.ln the bank
wouldbe recordedas
reconciliation,
the correction
a. an additionto the ledgerbalanceof cash.
b. a deductionfrom the bankstatementbalance.
c. an additionto the bankstatementbalance.
d. a deductionfrom the ledgerbalanceof cash.
30. Two bankstatementamountsthatrequirejournalentriesare
a. depositin transitand bankservicecharges.
checksand an errorin recordinga check.
b. outstanding
of a notereceivable
and depositin transit.
c. collection
fund)check.
d. bankservicechargesand an NSF (notsufficient
FBLA CompetitiveEvents Study Guide 2008-2010
11
AccountinglAnswerKey
1) D
2)C
3) B
4) A
s)c
6)B
7)C
8) C
9)A
1 0 )D
Accountingll AnswerKey
11) A
12) A
13) I
14) C
15) D
16) C
17) D
18) A
19) B
20) A
1) D
11)B
12) A
1 3 )D
1 4 )D
4) L)
1 5 )B
5) C
1 6 )B
6) Ll
1 7 )C
7)ts
1 8 )I
IJ) B
,,)c
19) L)
2 0 )A
r0)A
Eanlrng & FinancialSystemsAnswcr Kc,
2lc
l) n
r) n
2)A
3) C
4) B
5) B
1) C
2)B
3)A
14) C
6) ts
r5) A
16) rl
/)D
B) C
9) C
1 0 )n
17) B
18) B
19) D
20) n
BusinessCalculationsAnswer
r1)c
1) D
12) B
B
13)B
3 B
D
1 4 )A
1 a t )A
5 B
r6) B
1 7 )A
7 B
r B )n
B
19) D
I B
2A) A
10 ) c
Answer
Kev
BusinessCommunication
1) A
2)C
,r) A
5)A
6)A
7)C
8)C
e)c
10)A
11) B
12) B
13) B
14) B
15) A
16) B
17) D
18) A
19) C
20) D
FBLA CompetitiveEvents Study Guide 2048-2010
21) D
22) A
23) A
24) A
25j C
26) D
28) C
29) A
30) D
21)A
22JB
23)A
24) A
?s)c
26) C
2 7 )D
2nJA
21J)A
30) B
2 r) B
22) B
23) A
24J D
2s) c
26) C
21J C
28)n
2s) D
30) r)
21)
22
23
24
25
2S
D
D
D
C
28 D
29 D
30 D
21) D
22) D
24) D
26) D
27) D
28) B
29) B
30) B
234