PART I

1. Name three objects of bookkeeping.

2. Define and give examples of three classes of debits; of credits.

3. What are the general rules for debit and credit?

4. What is meant by the term _balance_? When is an account said to show a debit balance, and when a credit balance?

5. How many methods of bookkeeping are in use? Name them.

6. How is double entry distinguished from single entry bookkeeping?

7. What is the fundamental principle of double entry bookkeeping?

8. Name two or more advantages of double entry bookkeeping.

9. What name is given to books used for bookkeeping records?

10. Into how many classes are account books divided? Give examples.

11. Name and give the principal uses of the most commonly used books.

12. What is meant by _journalizing_? by _posting_?

13. What is a promissory note?

14. What is your understanding of the term _bills receivable_ and _bills payable_?

15. What is the name of the book in which a record of bills receivable and bills payable is kept?

16. What is _an acceptance_?

17. What is _discount_? _exchange_?

18. What is a _deposit slip_ and how is it used?

19. What is a _signature card_ and what are its uses?

20. What is meant by _indorsement of checks_?

21. Prepare three forms of indorsement and explain the meaning of each.

22. What is meant by _petty cash_? How is the account of petty cash kept?

23. Mr. H. B. Emerson is a dealer in coal and lumber. That he may know what profits are made in each branch of his business, he keeps accounts in his ledger with coal and lumber. In his sales book, one column is used for lumber sales and one for coal sales. No purchase book is kept. His assets and liabilities are as follows:

ASSETS Cash in State bank $1,427.30 Inventory, coal 600.00 " lumber 1,750.00 Frank Knowlton, note due Aug. 2nd 75.00 $3,852.30 -------- LIABILITIES Eastern Coal Co., open account 260.00 Northern Lumber Co., " 420.00 680.00 --------

The following transactions are recorded:

May 3. Bought from John Weber, for cash, lumber $130.00; paid by check No. 19.

May 4. Sold to Edward Walsh, on account, 2 tons coal @ 7.00, $14.00.

May 5. Drew from bank for petty cash, check No. 20, $10.00; sold to Franklin & Co., lumber, $256.00.

May 6. Sold for cash, coal $17.50; received from Edward Walsh, on account, $10.00.

May 7. Gave Northern Lumber Co., check No. 21, $220.00, 60-day note, $200.00.

May 8. Accepted 30-day draft of Eastern Coal Co., $260.00; paid for repairs to desk, cash, $1.50.

Make all necessary entries in books of original entry to properly record the above.

REVIEW QUESTIONS ON THE SUBJECT OF THEORY OF ACCOUNTS