Chapter 2

A  credit to rent expense and credit to prepaid rent

B  debit to rent expense and debit to prepaid rent

C  debit to rent expense and credit to prepaid rent

D  credit to rent expense and debit to prepaid rent

A  interest expense

B  prepaid expenses

C  income loss

A  debit to rent expense for $3,000 and credit to prepaid rent $3,000

B  credit to rent expense $3,000 and debit to rent expense for $9,000.

C  credit to rent expense $9,000 and debit to prepaid rent for $3,000.

A  debit to supplies and debit to supplies expense

B  credit to supplies and debit to supplies expense

C  credit to supplies and credit to supplies expense

D  debit to supplies and credit to supplies expense

A  expenses paid at the time incurred

B  expensed in a later period than cash was paid

C  expenses incurred before cash is paid

A  asset, expense

B  liability, income

C  expense, asset

A  prepaid rent is debited, rent expense is credited

B  prepaid rent is credited, rent expense is credited

C  rent expense is debited, prepaid rent is credited

D  rent expense is debited, prepaid rent is debited

A  credited, debited

B  debited, debited

C  credited, credited

D  debited, credited

A  liabilities …. Revenue

B  asset/s … expense

C  expense … asset/s

A  a liability

B  an expense

C  revenue

D  an asset

A  Purchasing supplies that will be used later

B  Revenue collected when it is earned

C  Expense paid when it is incurred

A  transactions in which cash flow follows revenue recognition , transactions in which cash flow follows expense recognition.

B  transactions in which cash flow precedes revenue recognition, transactions in which cash flow precedes expense recognition.

C  transactions in which cash flow precedes expense recognition, transactions in which cash flow follows revenue recognition.

D  transactions in which cash flow precedes revenue recognition, transactions in which cash flow follows expense recognition.

A  False

B  True

A  revenues and expenses.

B  increases and decreases.

C  closing and post-closing.

D  assets and liabilities.

A  rebates

B  accruals

C  offset

A  after closing entries have been prepared

B  at the beginning of an accounting period

C  when the financial statements are prepared

D  after the financial statements have been prepared

A  payables; receivables

B  income; loss

C  increases; decreases

D  assets; liabilities

A  double-entry system

B  database accounting system

C  enterprise resource planning system

A  increases or decreases total assets

B  has a dual effect on the accounting equation

C  increases or decreases income

D  has a single effect on the accounting equation

A  When any external transaction or event occurs.

B  At the end of a period when preparing financial statements.

C  At the beginning of each reporting period.

D  After closing entries are prepared for the period.

A  A proposal to purchase $1,000 of inventory from supplier. Borrowing $10,000 from the bank.

B  The payment of employee salaries for the week. A proposal to purchase $1,000 of inventory from supplier.

C  The payment of employee salaries for the week. Borrowing $10,000 from the bank.

A  dual account

B  T-account

C  bank account

D  general account

A  has a dual effect on the accounting equation

B  effects only a single account

C  cannot effect more than one account

A  offset

B  balanced

C  adjusting

A  $165,000

B  $125,000

C  $75,000

D  $85,000

E  $65,000

A  the sum of daily transactions, the account title.

B  the account number, the account title, columns for increases and decreases.

C  the account number, the sum of daily transactions, columns for increases and decreases.

A  investment.

B  direct effect.

C  transaction.

D  indirect effect.

A  cash position of a company

B  operating activities of a company

C  financial position of a company

D  operating results of a company

A  True

B  False

A  dual or double

B  minimal

C  considerable

A  1.Analyze the transaction.
2.Record the transaction.
3.Post from the journal to the general ledger.
4.Prepare the unadjusted trial balance.

B  1.Prepare the unadjusted trial balance.
2.Analyze the transaction.
3.Post from the journal to the general ledger.
4.Record the transaction.

C  1.Analyze the transaction.
2.Record the transaction.
3.Prepare the unadjusted trial balance.
4.Post from the journal to the general ledger.

A  economic

B  domestic

C  external

A  liabilities, losses, assets, and expenses

B  liabilities, revenues, assets, and expenses

C  gains, revenues, losses, and expenses

A  Electronic Data Processing system.

B  Accounting Data system.

C  Enterprise Resource Planning (ERP) system.

A  before

B  after

C  the same as

A  Close the temporary accounts to retained earnings

B  Prepare the financial statements

C  Record adjusting entries and post to the general ledger accounts

D  Obtain information about external transactions from source documents

A  retained earnings

B  accrued invesments

C  retained assets

A  other comprehensive income items

B  non-operating revenue and expense items

C  positive net income

A  1.Prepare an unadjusted trial balance.
2.Record adjusting entries.
3.Prepare an adjusted trial balance.
4.Prepare financial statements.
5.Close the temporary accounts.

B  1.Close the temporary accounts.
2.Prepare financial statements.
3.Prepare an adjusted trial balance.
4.Record adjusting entries.
5.Prepare an unadjusted trial balance.

C  1.Prepare an unadjusted trial balance.
2.Prepare financial statements.
3.Prepare an adjusted trial balance.
4.Record adjusting entries.
5.Close the temporary accounts.

A  is not required to report comprehensive income

B  must use the two statement approach

C  must use the one statement approach

A  adjusted trial balance

B  post-closing trial balance

C  unadjusted trial balance

A  expense incurred, but not yet paid and cash that has been collected from customers

B  revenue earned, but not yet received and cash that has been collected from customers

C  expense incurred, but not yet paid and revenue earned, but not yet received

D  cash that has been paid for expenses and cash that has been collected from customers

A  current assets. property and equipment

B  current assets and long-term liabilities

C  paid-in capital and long-term liabilities

D  paid-in capital and retained earnings

A  a prepayment adjusting entry

B  an accrual adjusting entry

C  an estimate adjusting entry

A  $3,000

B  $24,000

C  $4,000

D  $12,000

A  Income

B  Investments

C  Liabilities or liability

A  the company’s financial performance, the cash received and paid during the year

B  the company’s financial performance, revenues and expenses for the period.

C  the cash received and paid during the year, revenues and expenses for the period.

A  False

B  True

A  current

B  noncurrent

A  after expense recognition and before revenue recognition

B  before expense recognition and after revenue recognition

C  after expense recognition and after revenue recognition

D  before expense recognition and before revenue recognition

A  $12,000

B  $7,000

C  $5,000

D  $6,000

A  the total claims against the company; the total economic resources of the company

B  the total assets of the company; the total invested in the company

C  the total economic resources of the company; the total claims against the company

D  the total liabilities of the company; the total assets of the company

A  ensure debits equal credits.

B  make assets equal liabilities plus owners’ equity.

C  recognize all revenues earned during the period.

D  record all external transactions at the end of the year.