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
