Accounting 101 Unit 3
The formula to calculate straight‐line depreciation is:
(Cost - residual value) / useful life
An adjusted trial balance is
A listing of accounts after adjusting entries have been recorded and posted
An example of a contra account is
Accumulated depreciation
Closing entries are prepared
After financial statements are prepared
The Accumulated Depreciation account appears on the
Balance Sheet and Income Statement
If there is a net loss there will be a ___________ balance in the Income Summary account before moving the balance to Retained Earnings
Debit
Which of the following is a temporary account?
Dividends
The following does not describe the matching principle
Expenses are reported on the income statement when cash is paid
What of the following is a true statement about depreciation?
It is the allocation of the cost of plant or equipment over the time they are expected to be used
Which of the following is a non‐depreciable asset?
Land
The final step in the accounting cycle is to:
Prepare post closing trial balance
Cost outlays are recorded as an expense when they are incurred to earn revenue in the _______________ accounting period
Present
If there is a net loss there will be a ___________ balance in the Income Summary account after all closing entries have been posted
Zero