Exam 2

A business uses a credit to record A) an increase in an expense account B) A decrease in an asset account C) A decrease in an unearned revenue D) A decrease in a revenue account E) A decrease in a capital accounts

A decrease in an asset accounts

The length of time covered by a set a periodic financial statements primarily a year for most companies is referred as the A) fiscal year B) natural business year C) accounting period D) Business cycle E) calendar year

Accounting period

A debit is used to record an increase in all of the following accounts except A) supplies B) cash C) accounts payable D) owners withdrawls E) prepaid insurance

Accounts payable

Identify the accounts below that is classified as a liability account A) cash B) accounts payable C) Salaries expense D) J Jackson capital E) Equipment

Accounts payable

Identify the accounts below that is classified as an asset in a companies chart of accounts A) accounts receivable B) accounts payable C) owners capital D) unearned revenue E) Service revenue

Accounts receivable

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenue is A) cash basis accounting B) The expense recognition matching principle C) The time period assumption D)accrual basis accounting E) revenue basis accounting

Accrual basis accounting

Adjusting entries A) affects only income statements accounts B) affects only balance sheets accounts C) affects both income statement and balance sheet accounts D) affects cash accounts E) affects only equity accounts

Affects both income statement and balance sheet accounts

Adjusting entries made at the end of the accounting. Accomplish all of the following except A) updating liability and acid accounting to their proper balances B) assigning revenues to the period in which they are earned C) assigning expense to the period in which they are incurred D) assuring that financial statements reflect that revenues earned and the expenses incurred E) assuring that external transaction amount remain unchanged

Assuring that external transaction amounts remain unchanged

The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called A) Accrual basis account B) operating cycle counting C) cash basis accounting D) revenue recognition accounting E) current basis accounting

Cash basis accounting

The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is The A) recognition principle B) cost principle C) cash basis of accounting D) Expense recognition ( matching) principal E) Time period Principal

Expense recognition matching principle

The accrual basis of accounting A) is generally excepted for external reporting because it is more useful than cash basis for most business decisions B) The flood because it gives complete information about cash flow's C) recognize as revenues went received in cash D) recognize his expenses were paid in cash E) illuminates the need for adjusting entries at the end of each period

Is generally excepted for external reporting because it is more useful than cash basis for most business decisions

Prepaid expenses depreciation expenses occurred expenses unearned revenues and accrued revenues are all examples of A) items are required contra accounts B) items that require adjusting entries C) assets and equity accounts D) asset accounts E) income statement accounts

Items that require adjusting entries

The main purpose of adjusting entries is to A) Record external trans actions and events B) Record internal trans action and events C) recognize assets purchased during the period D) recognize debt paid during a period E) correct errors in the accounting records

Record internal transactions and events

The accounting principle Deborah choirs revenue to be recorded when earned is the A) expense recognition matching principle B) revenue recognition principle C) Time. Assumption D) accrual reporting principle E) going concern assumption

Revenue recognition principle

Which of the following is not an asset account A) Cash B) land C) Service revenue D) Buildings E) equipment

Service revenue

Identify the accounts below that is classified as an asset account A) unearned revenue B) accounts payable C) supplies D) J Jackson capital E) Service revenue

Supplies

A tool that represents a ledger account is used to show the effects of a trans action is called A) withdrawls account B) Capital accounts C) trial balance D) T- account E) balance column sheet

T account

An account balance is A) The total of the credit side of the accounts B) The total of the debit side of the account C) The difference between the total debits and total credit for an account including the beginning balance D) used to identify source documents E) always a credit

The difference between the total debits and total credits for an account including the beginning balance

Identify the statement below that is correct A) The left side of a T account is the credit side B) debits decrease assets and expense accounts, and increased liability, equity, and revenue accounts C) The left side of a T account is the debit side D) The credit increases asset and expense account and decrease liability equity and revenue accounts E) The total amount debited needs not equal the total amount credited for a particular transaction

The left side of the T account is the credit side

Identify the accounts below that is classified as a liability in a companies chart of accounts A) cash B) unearned revenue C) salaries expense D) accounts receivable E) supplies

Unearned revenue

Which of the following is not an equity accounts A) unearned revenue B) owners capital C) Service revenue D) wages expense E) owners withdrawls

Unearned revenue

Identify the accounts below that impacts the equity of a business A) Utilities expense B) accounts payable C) accounts receivable D) cash E) Unearned revenue

Utilities expense

Select the account below deck normally has a credit balance A) cash B) Office equipment C) Wages payable D) owners withdrawls E) Sales salaries expense

Weges payable