accounting 200- chapter 4 multiple choice

Which of the following describes an accrued expense?

Incurred but not yet paid or recorded.

Which of the following accounts will reflect the account's beginning balance on the adjusted trial balance?

Retained earnings

Which account will have a zero balance after closing entries have been journalized and posted?

Service Revenue

An accounting time period that is one year in length is called:

a fiscal year

Adjusting entries can be classified as:

accruals and deferrals

An adjusting entry:

affects a balance sheet account and an income statement account.

The difference between the balance of a plant asset account and the related accumulated depreciation account is termed:

book value.

Closing entries:

cause the revenue and expense accounts to have zero balances.

As prepaid expenses expire with the passage of time, the correct adjusting entry will be a:

debit to an expense account and a credit to an asset account.

Each of the following is a major type (or category) of adjusting entry except:

earned expenses

Adjusting entries are:

needed to ensure that the expense recognition principle is followed.

The preparation of adjusting entries is:

needed to ensure that the expense recognition principle is followed.

From an accounting standpoint, the acquisition of long-lived assets is essentially a(n):

prepaid expense

An adjusted trial balance:

proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made.

Before adjusting entries, unearned revenues are:

received and recorded as liabilities before they are recognized as revenue.

A company usually determines the amount of supplies used during a period by:

taking the difference between the balance of the Supplies account and the cost of supplies on hand.

The periodicity assumption states that:

the economic life of a business can be divided into artificial time periods.

Expenses are recognized when:

they contribute to the production of revenue.

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit:

unearned rent revenue (i think)

In a service-type business, revenue is recognized:

when the service is performed