Accounting- Chapter 2

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded

Revenues and expenses should be recorded in the same period to which they relate

The entry to adjust the accounts for salaries accrued at the end of the account period is

A contra asset account for land will normally appear on the balance sheet

An adjusting entry would adjust an expense account so the expense is reported when incurred

The type of account and normal balance of Unearned consulting fees is

in the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry?

Accumulated depreciation is reported on the income statement

The matching concept supports matching expenses with the related revenues

The account type and normal balance of unearned revenue is

A fixed asset's market value is reflected on the balance sheet

which of the following is an example of accrued revenue?

using accrual accounting, revenue is recorded and reported only

The account type and normal balance of prepaid expense is

The type of account and normal balance of prepaid insurance is

fees payable would appear on the balance sheet as a(n)

which of the following is considered to be unearned revenue?

Data for an adjusting entry described as "accrued wages, $2,020" requires a

a company depreciates its equipment $500 a year. The adjusting entry on December 31 is a debit to depreciation expense, $500 and a credit to equipment, $500

a company realizes that the last two day's revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to accounts receivable and a credit to fees earned

using accrual accounting, expense are recorded and reported only

the accounting concepts upon which deferrals and accruals are based is

accumulated depreciation accounts are liability accounts

if there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a (n)

the balance sheet accounts are referred to as real or permanent accounts

the income statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credit are $77,520. What does this information mean to the accountant?

The income summary account is closed to the owner's capital account

On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount

the usual presentation of the statement of owner's equity is (1) beginning capital, (2) net income or loss, (3) drawing, (4) owner's contributions, (5) ending capital

during the end-of-period processing, which of the following best describes the logical order of steps?

which of the accounts below would NOT appear in the balance sheet columns of the end-of-period spreadsheet?

On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would.

After net income is entered on the end-of-period spreadsheet, the balance sheet debit and credit columns must

Accumulated depreciation is a permanent account

After net income or loss is entered on the work sheet, the debit column total must equal the credit column total for the Balance sheet pair of columns

The classified balance sheet will show which liability subsections?

Once the adjusting entries are posted, the adjusted trial balance is prepared to

which of the following accounts will be closed to the capital account at the end of the fiscal year?

after all of the account balances have been extended to the balance sheet columns of the work sheet, the totals of the debit and credit columns show debits of $37, 686 and the credit of $41,101. This indicates taht

the income summary account is also called

which of these accounts would appear in the balance sheet columns of the end-of-period spreadsheet?

accumulated depreciation appears on the

On the work sheet, the capital and drawling account balances are extended to the balance sheet columns

Which of the following accounts ordinarily appears in the post-closing trial balance?

Net income is shown on the work sheet in the income statement debit column and the balance sheet credit column

the end-of-period spreadsheet

which of the following has steps of the accounting cycle in proper sequence (come steps may be missing)?

On which financial stement will income summary be shown?

The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having

What is the purpose of the adjusted trial balance?

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded

The account type and normal balance of unearned revenue is

Which of the following accounts would likely be included in a deferral adjusting entry?

Generally accepted accounting principles require that companies use the ______ of accounting.

For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs

fees payable would appear on the balance sheet as a (n)

Using accrual accounting, expenses are recorded and reported only

The revenue recognition concept requires that the reporting of revenue be included int he period when cash for the service is received

prepaid expenses are eventually expected to become

adjusting entries affect at least one

At year-end, the balance in the prepaid insurance account, prior to any adjustements, is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors on revenues, expense, and net income?

The unexpired insurance at the end of the fiscal period represents

Depreciation expense is reported on the balance sheet as an addition to the related asset

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the account period, the amount of the adjusting entry is

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

the matching concept

a company realizes that the last two day's revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to accounts receivable and a credit to fees earned

prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as a (n)

Accumulated depreciation and depreciation expense are classified, respectively, as

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been revorded

proper reporting of revenue and expenses in a period is due to the accounting period concept

After all of the account balances have been extended to the balance sheet columns of the work sheet, the totals of the bedit and credit columns are $36,755 and $32,735, respectively. What is the amount of net income or net loss for the period?

closing entries

Notes receivable due in 390 days appear on the

During the end-of-period processing, which of the following best describes the logical order of steps?

Accumulated depreciation is a permanent account

the majority of businesses end of fiscal year on December 31

the income statement is prepared from

accrued expenses are ordinarily listed on the balance sheet as current assets

After all of the account balances have been extended to the balance sheet columns of the work sheet, the totals of the debit and credit columns show debits of $37, 686 and the credit of $41, 101. This indicates that

prepaid insurance is reported on the balance sheet as a

the drawing account is a temporary accoutn

Which of the following is NOT an essential part of the accounting records?

Which of the following is NOT true about closing entries?

The drawing account is closed to the income summary account

The income statement should be prepared

Of the following steps of the accounting cycle, which step should be completed last?

The amount of the net income for a period appears on both the income statement and the balance sheet for that period

accumulated depreciation appears on the

After net income or loss is entered on the work sheet, the debit column total must equal the credit column total for the balance sheet pair of columns

the statement of owner's equity should be prepared

during the closing process, some balance sheet accounts are closed and end of period with a zero balance

the last step of the accounting cycle is to prepare a post-closing trial balance