Accy 200 CQ1

Which of the following accounting methods accomplishes much of the matching revenues and expenses? Accrual accounting. Full disclosure accounting. Match accounting. Cash accounting.

Accural accounting

An expanded version of the accounting equation could be:

Assets= Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues - Expenses - Dividends

When a firm purchase supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required:

Dr. | Supplies expense Cr. | Supplies

A credit entry will: increase an expense account. increase a liability account. increase an asset account. decrease paid-in capital.

increase a liability account.

The effect of an adjustment on the financial statements is usually to: make the balance sheet balance. increase net income. match revenues and assets. increase the accuracy of both the balance sheet and income statement.

increase the accuracy of both the balance sheet and income statement.

A debit entry will: increase the balance of a revenue account. always increase the account balance. increase the balance of an expense account. always decrease the account balance.

increase the balance of an expense account.

The balance sheet of an entity: reflects the impact of inflation on the replacement cost of the assets. shows amounts that are not adjusted for changes in the purchasing power of the dollar. shows the fair value of the assets at the date of the balance sheet. reports plant and equipment at its opportunity cost.

shows amounts that are not adjusted for changes in the purchasing power of the dollar.

The Statement of Cash Flows: shows the change in the fair value of the entity's common stock during the period. shows how cash changed during the period. shows the dividends that will be paid in the future. is an optional financial statement.

shows how cash changed during the period.

The principle of consistency means that: the accounting methods used by an entity never change. the effect of any change in an accounting method will be disclosed in the financial statements or notes thereto. the same accounting methods are used by all firms in an industry. there are no alternative methods of accounting for the same transaction.

the effect of any change in an accounting method will be disclosed in the financial statements or notes thereto.

The going concern concept refers to a presumption that: the entity will not be involved in a merger within a year. the entity will be profitable in the coming year. top management of the entity will not change in the coming year. the entity will continue to operate in the foreseeable future.

the entity will continue to operate in the foreseeable future.