Accounting #2 Trivia Quiz

Answer: Subsidiary ledger

The subsidiary ledger frees the general ledger from the details of individual account balances. A subsidiary ledger is an addition to the general ledger. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 244).

Answer: 36.5 days

The collection period ratio is calculated as follows: Days in the Year divided by Receivables Turnover (Receivables Turnover = Net Credit Sales divided by Average Accounts Receivable) = the Average Collection Period. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 351). So, Receivables Turnover = $50,000 divided by $5,000, which is equal to 10 times.

Then, 365 divided by 10 = 36.5.

Answer: True

The Canadian Institute of Chartered Accountants (CICA) publishes the generally accepted accounting principles (GAAP) that are accepted in Canada. The CICA Handbook has legal status for companies that follow the regulations of the Canadian Business Corporations Act. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 11).

Answer: Assets = Liabilities + Owner's Debt

Assets = Liabilities + Owner's Equity/Capital is the standard form of the basic accounting equation.

Assets = Liabilities + Owner's Equity/Capital - Drawings + Revenues - Expenses is an expanded form of the basic accounting equation. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 14).

Answer: Owner's Drawings

Owner's Equity/Capital has a normal credit balance. Owner's Drawings decreases Owner's Equity/Capital, and has a normal debit balance. Fees Earned is a Revenue account, which has a normal credit balance, and Rent Payable is a Liability account, which also has a normal credit balance. Accounts with normal credit balances are increased by credits and decreased by debits. Accounts with normal debit balances are decreased by credits and increased by debits.