Acct. 3311 ch.3

When a merchandiser prepares closing entries, Cost of Goods Sold is credited and Income Summary is debited. True False

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Adjustments are often prepared a. after the balance sheet date, but dated as of the balance sheet date. b. after the balance sheet date, and dated after the balance sheet date. c. before the balance sheet date, but dated as of the balance sheet date. d. before the balance sheet date, and dated after the balance sheet date

a

The difference between the cost of a depreciable asset and its related contra account, Accumulated Depreciation is referred to as the asset's: a. book value. b. fair value. c. market value. d. real value

a

Adjusting entries can be classified as either: a. accruals or reversals. b. prepayments or accruals. c. real or nominal. d. internal or external.

b

In the closing process all of the revenue and expense account balances are transferred to the: Capital account. Income Summary account. Retained Earnings account. Dividends account.

b

Which of the following is an internal event? a. A transaction with another entity. b. Using machinery in operations. c. A change in the price of a good that an entity buys or sells. d. A flood.

b

All of the following statements about contra asset accounts are true except: a. Contra asset accounts have normal credit balances. b. Contra asset accounts are permanent accounts. c. Contra asset accounts are not reported in the financial statements. d. Contra asset accounts are increased with credits.

c

If the balances in both accounts receivable and accounts payable decrease during the year a. the decrease in both the accounts receivable and accounts payable balances will result in a decrease in cash for the period. b. the decrease in both the accounts receivable and accounts payable balances will result in a increase in cash for the period. c. the decrease in the accounts receivable balance would result in an increase in cash for the period. d. the decrease in the accounts payable balance would result in a increase in cash for the period.

c

Which of the following columns is generally found on a worksheet? Chart of accounts. Statement of cash flows. Income statement. All of these answer choices are correct

c

Which of the following is not transferred to Retained Earnings at the end of the period? a. Revenues. b. Dividends. c. Common stock. d. Expenses.

c

Each general journal entry consists of how many parts? One. Two. Three. Four.

d

Factors that shape an accounting information system include the a. transactions in which the business engages. b. informational demands of management. c. volume of data to be handled. d. all of these answer choices are correct

d

The adjusting entry to record an accrued expense includes a debit to: a liability account and a credit to an expense account. a liability account and a credit to a revenue account. an expense account and a credit to a revenue account. an expense account and a credit to a liability account.

d

When a corporation purchases a computer for cash, a. liabilities increase. b. stockholders' equity decreases. c. assets increase. d. the account Cash will be credited

d

Real accounts are periodically closed. True False

f Real or permanent accounts are not closed; only nominal (also called temporary) accounts are closed at the end of each accounting period

After journalizing and posting all adjusting entries, a company prepares an adjusted trial balance that is the primary basis for preparation of the financial statements. True False

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Depreciation and amortization allocate the cost of long-term assets to the periods which benefit from their use. True False

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Financial statements can be prepared directly from the adjusted trial balance. True False

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Revenue, equity and liability accounts have normal credit balances. True False

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When a company makes reversing entries, it debits all cash payments of expenses to the related expense account. True False

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