1. A document prepared in the purchase department of most firms for recording the description, quantity and related information for goods purchased from their vendors is called a: a. Customer order b. Sales order c. Sales invoice d. Purchase order e. Purchase requisition 2. A place where gross pay, withholdings, and net pay are recorded for all employees. The amounts are normally totaled and posted to the general ledger monthly. The above is called a: a. Personnel record b. Labor distribution report c. Payroll journal d. Employee time card e. Perpetual employee record 3. A document indicating a reduction in the amount due from a customer because of returned goods or an allowance granted is called a: a. Debit memo b. Sales return and allowances journal c. Credit memo d. Sales invoice e. Uncollectible account authorization form 4. A document prepared at the time of shipment indicating the description of the merchandise, the quantity shipped and other relevant data. It is a written contract of the receipt and shipment of goods between the seller and the carrier. This document is a: a. Remittance advice b. Bill of lading c. Purchase requisition d. Receiving report e. Sales order 5. When a customer of a company inquires about the amount which the customer owes the company, the clerk handling the question would go to the: a. Accounts receivable general ledger b. Original copy of the monthly statement c. Sale journal d. Accounts receivable subsidiary ledger e. Customer service department 6. Your company purchased merchandise from the “X” corporation. As the “gopher” person in your company, you picked up the merchandise as you delivered the order to buy. You paid for the merchandise instantly with one of your company’s checks. Where would this transaction be recorded first by your company? a. Purchase journal b. Accounts payable subsidiary ledger c. Cash disbursements journal d. General journal e. General ledger 7. Depreciation of fixed assets used during the year was estimated to be $2,000. Where would this information be recorded first? a. General ledger – accumulated depreciation account b. Check register c. Income summary d. General journal e. General ledger – fixed asset account 8. The clerk who opens mail is assigned responsibility for preparing a document which identifies all cash collections received in the mail for a given day. This document is called: a. Cash receipt prelist b. Receiving report c. Accounts receivable subsidiary record d. Voucher e. Collection authorization form 9. A client’s accounting records are unfamiliar to a new auditor. Where would a new auditor go to learn the names and numbers of the accounts being debited and credited in the transactions? a. General journal b. General ledger c. Chart of accounts d. Internal control flowcharts e. Inquire of the client 10. Which of the following transactions would be recorded in the general journal? a. Sales return and credit memo b. Purchase of supplies inventory (done frequently) c. Recording of payroll checks d. Depreciation recorded annually e. Transfer of goods from work-in-process to finished goods inventory 11. The purpose of a bank reconciliation is to: a. Make sure the bank hasn’t made a mistake b. Make sure our cash bookkeeper hasn’t made a mistake c. Make sure all cash which our company received go deposited d. Identify the differences between the bank balance per bank statement and our balance per books e. Show how much money our company has at any point in time 12. Which of the following transactions would NOT be recorded in the sales journal? a. Cash sale b. Charge sale c. Credit memo allowance for defective merchandise d. Sales return e. All of the above would be recorded in the sales journal 13. Financial statements are prepared using numbers taken directly from the: a. Special journals b. General journals c. General ledger d. Subsidiary ledgers e. Source documents 14. Which of the following accounts is NOT closed to Income Summary at year-end? a. Interest expense b. Bad debt expense c. Prepaid expense d. Depreciation expense e. Cost of goods sold 15. Which of the following documents and records is NOT required to prepare a bank reconciliation? a. Prior month’s bank reconciliation b. Cash balance per general ledger c. Cash balance per bank d. Prior month’s bank statement e. Cash disbursement journal 16. Which step in the accounting process directly precedes the preparation of closing entries? a. Preparation and posting of adjusting entries b. Preparation of unadjusted trial balance c. Preparation of financial statements d. Preparation of adjusted trial balance e. Preparation of internal documents 17. In determining cost of goods sold under the periodic inventory method, which account is NOT affected? a. Sale discounts b. Purchase returns and allowances c. Purchase discounts d. Freight-in e. Inventory 18. Which of the following documents originates outside the company? a. Purchase order b. Cash sale invoice c. Employee time card d. Vendor invoice e. Bill of lading