What is the time period assumption?
The economic life of a business can be divided into artificial time periods.
Which principle dictates that efforts (expenses) be recorded with accomplishments (revenues)?
Matching principle.
Which one of these statements about the accrual basis of accounting is false?
Companies record revenue only when they receive cash, and record expense only when they pay out cash.
Adjusting entries are made to ensure that:
All of the above.
Each of the following is a major type (or category) of adjusting entry except:
earned expenses.
The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on hand at the end of the period, the adjusting entry is:
Supplies Expense 750
Supplies 750
Adjustments for unearned revenues:
decrease liabilities and increase revenues.
Adjustments for prepaid expenses:
decrease assets and increase expenses.
Queenan Company computes depreciation on delivery equipment at $1,000 for the month of June. The adjusting entry to record this depreciation is as follows:
Depreciation Expense 1,000
Accumulated Depreciation-Delivery
Equipment 1,000
Adjustments for accrued revenues:
increase assets and increase revenues.
Colleen Mooney earned a salary of $400 for the last week of September. She will be paid on October 1. The adjusting entry for Colleen's employer at September 30 is:
Salaries Expense 400
Salaries Payable 400
Which statement is incorrect concerning the adjusted trial balance?
The adjusted trial balance lists the account balances segregated by assets and liabilities.
Which account will have a zero balance after a company has journalized and posted closing entries?
Service Revenue.
Which types of accounts will appear in the post-closing trial balance?
Permanent accounts.
All of the following are required steps in the accounting cycle except:
preparing a work sheet.