BUSAC186 Test 2

When recording an adjustment for the use of equipment during the current accounting period, which two accounts are affected?

Accumulated Depreciation and Depreciation Expense

Which of the following are ways of expressing the basic accounting equation? (Select all that apply.)

Assets = Liabilities + Stockholders' Equity Assets - Liabilities = Stockholders' Equity Assets - Stockholders' Equity = Liabilities

True or false: The order of the heading of an income statement indicates the name of the statement first, the period of time covered, and the name of the company third.

False

Which of the following are financial statements?

Statement of retained earnings Statement of cash flows Income statement Balance sheet

On September 1, Taggert Company paid $1,800 for a 6-month insurance premium beginning September 1. Which of the following statements are correct regarding the accounting for this insurance over the six-month period? (Check all that apply.)

Taggert will debit Insurance Expense for $300 on Sept. 30. Taggert will debit Prepaid Insurance for $1,800 on Sept. 1. Taggert will credit Prepaid Insurance for $300 on Sept. 30.

A balance sheet shows...

assets, liabilities, and stockholders' equity at a single point in time

Which of the following are reported on a balance sheet?

cash retained earnings stockholders' equity assets liabilities

Sole proprietorship, _______ , and _______ are the three primary forms of business organization. (Enter one word per blank.)

corporation, partnership

After the adjustments have been completed, the balance in the Rent Expense account represents the_______

cost of rent for the accounting period

The adjusting entry for supplies used during the period requires a____________to Supplies and a____________ to Supplies expense.

credit, debit

Accumulated Depreciation has a normal _____ balance which indicates that it___________Total Assets.

credit, decreases

The seller's adjusting entry to record the revenue earned by fulfilling its obligation to its buyers which had been collected in advance requires a (debit/credit) to Deferred Revenue and a (debit/credit) to Sales Revenue

debit, credit

Retained earnings are ______. (Select all that apply.)

decreased by dividends increased by net income

Adjustments help to ensure that all ______ are recorded in the period in which they are incurred.

expenses

Businesses earn profits by...

providing service or selling goods at more than the cost to provide the service or deliver the goods having revenues greater than expenses

Which of the following is true about the adjusting entry to record the revenue for which the seller has performed of its obligations but not yet collected?

stockholders' equity will increase assets will increase

An income statement is referred to as a single-step income statement because...

the format separates total revenues from expenses and reports a single measure of income