Chapter 2

A  debit to rent expense and credit to prepaid rent

B  debit to rent expense and debit to prepaid rent

C  credit to rent expense and debit to prepaid rent

D  credit to rent expense and credit to prepaid rent

A  interest expense

B  prepaid expenses

C  income loss

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

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

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

A  credit to supplies and credit to supplies expense

B  credit to supplies and debit to supplies expense

C  debit to supplies and credit to supplies expense

D  debit to supplies and debit to supplies expense

A  expenses paid at the time incurred

B  expenses incurred before cash is paid

C  expensed in a later period than cash was paid

A  liability, income

B  expense, asset

C  asset, expense

A  prepaid rent is credited, rent expense is credited

B  prepaid rent is debited, rent expense is credited

C  rent expense is debited, prepaid rent is credited

D  rent expense is debited, prepaid rent is debited

A  credited, credited

B  debited, debited

C  debited, credited

D  credited, debited

A  expense … asset/s

B  asset/s … expense

C  liabilities …. Revenue

A  revenue

B  a liability

C  an asset

D  an expense

A  Purchasing supplies that will be used later

B  Expense paid when it is incurred

C  Revenue collected when it is earned

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

B  transactions in which cash flow follows revenue recognition , transactions in which cash flow follows 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  True

B  False

A  closing and post-closing.

B  increases and decreases.

C  assets and liabilities.

D  revenues and expenses.

A  rebates

B  offset

C  accruals

A  after the financial statements have been prepared

B  at the beginning of an accounting period

C  when the financial statements are prepared

D  after closing entries have been prepared

A  income; loss

B  increases; decreases

C  payables; receivables

D  assets; liabilities

A  double-entry system

B  enterprise resource planning system

C  database accounting 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 beginning of each reporting period.

C  After closing entries are prepared for the period.

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

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. Borrowing $10,000 from the bank.

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

A  dual account

B  bank account

C  general account

D  T-account

A  effects only a single account

B  has a dual effect on the accounting equation

C  cannot effect more than one account

A  offset

B  balanced

C  adjusting

A  $65,000

B  $165,000

C  $75,000

D  $125,000

E  $85,000

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

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

C  the sum of daily transactions, the account title.

A  investment.

B  transaction.

C  direct effect.

D  indirect effect.

A  operating results of a company

B  operating activities of a company

C  cash position of a company

D  financial position of a company

A  False

B  True

A  minimal

B  considerable

C  dual or double

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

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

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

A  external

B  economic

C  domestic

A  liabilities, losses, assets, and expenses

B  gains, revenues, losses, and expenses

C  liabilities, revenues, assets, 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  Prepare the financial statements

B  Record adjusting entries and post to the general ledger accounts

C  Obtain information about external transactions from source documents

D  Close the temporary accounts to retained earnings

A  retained earnings

B  retained assets

C  accrued invesments

A  positive net income

B  other comprehensive income items

C  non-operating revenue and expense items

A  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.

B  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.

C  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.

A  is not required to report comprehensive income

B  must use the one statement approach

C  must use the two statement approach

A  unadjusted trial balance

B  post-closing trial balance

C  adjusted trial balance

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

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

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

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

A  paid-in capital and long-term liabilities

B  current assets. property and equipment

C  paid-in capital and retained earnings

D  current assets and long-term liabilities

A  an accrual adjusting entry

B  an estimate adjusting entry

C  a prepayment adjusting entry

A  $12,000

B  $4,000

C  $3,000

D  $24,000

A  Investments

B  Liabilities or liability

C  Income

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

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

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

A  False

B  True

A  noncurrent

B  current

A  after expense recognition and after revenue recognition

B  before expense recognition and before revenue recognition

C  after expense recognition and before revenue recognition

D  before expense recognition and after revenue recognition

A  $5,000

B  $6,000

C  $12,000

D  $7,000

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

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

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

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

A  ensure debits equal credits.

B  recognize all revenues earned during the period.

C  make assets equal liabilities plus owners’ equity.

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