Chapter 2

A  debit to rent expense and credit to prepaid rent

B  credit to rent expense and debit to prepaid rent

C  debit to rent expense and debit to prepaid rent

D  credit to rent expense and credit to prepaid rent

A  interest expense

B  income loss

C  prepaid expenses

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 credit to supplies expense

B  debit to supplies and debit to supplies expense

C  credit to supplies and debit to supplies expense

D  credit to supplies and credit 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  asset, expense

C  expense, asset

A  rent expense is debited, prepaid rent is credited

B  prepaid rent is debited, rent expense is credited

C  rent expense is debited, prepaid rent is debited

D  prepaid rent is credited, rent expense is credited

A  credited, debited

B  debited, debited

C  debited, credited

D  credited, credited

A  liabilities …. Revenue

B  expense … asset/s

C  asset/s … expense

A  an asset

B  a liability

C  revenue

D  an expense

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  closing and post-closing.

B  assets and liabilities.

C  revenues and expenses.

D  increases and decreases.

A  offset

B  accruals

C  rebates

A  after closing entries have been prepared

B  when the financial statements are prepared

C  at the beginning of an accounting period

D  after the financial statements have been prepared

A  payables; receivables

B  income; loss

C  increases; decreases

D  assets; liabilities

A  database accounting system

B  double-entry system

C  enterprise resource planning system

A  has a dual effect on the accounting equation

B  increases or decreases income

C  has a single effect on the accounting equation

D  increases or decreases total assets

A  At the beginning of each reporting period.

B  After closing entries are prepared for the period.

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

D  When any external transaction or event occurs.

A  The payment of employee salaries for the week. 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  A proposal to purchase $1,000 of inventory from supplier. Borrowing $10,000 from the bank.

A  bank account

B  T-account

C  dual account

D  general account

A  has a dual effect on the accounting equation

B  cannot effect more than one account

C  effects only a single account

A  balanced

B  adjusting

C  offset

A  $65,000

B  $75,000

C  $85,000

D  $165,000

E  $125,000

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  indirect effect.

C  direct effect.

D  transaction.

A  operating activities of a company

B  financial position of a company

C  operating results of a company

D  cash position of a company

A  False

B  True

A  dual or double

B  minimal

C  considerable

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.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.Post from the journal to the general ledger.
4.Prepare the unadjusted trial balance.

A  economic

B  external

C  domestic

A  liabilities, losses, assets, and expenses

B  liabilities, revenues, assets, and expenses

C  gains, revenues, losses, and expenses

A  Enterprise Resource Planning (ERP) system.

B  Accounting Data system.

C  Electronic Data Processing system.

A  before

B  after

C  the same as

A  Close the temporary accounts to retained earnings

B  Record adjusting entries and post to the general ledger accounts

C  Obtain information about external transactions from source documents

D  Prepare the financial statements

A  retained assets

B  accrued invesments

C  retained earnings

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

A  must use the one statement approach

B  must use the two statement approach

C  is not required to report comprehensive income

A  adjusted trial balance

B  post-closing trial balance

C  unadjusted trial balance

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

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

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

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

A  current assets and long-term liabilities

B  paid-in capital and long-term liabilities

C  current assets. property and equipment

D  paid-in capital and retained earnings

A  an accrual adjusting entry

B  a prepayment adjusting entry

C  an estimate adjusting entry

A  $4,000

B  $3,000

C  $12,000

D  $24,000

A  Liabilities or liability

B  Income

C  Investments

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

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

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

A  False

B  True

A  current

B  noncurrent

A  before expense recognition and before revenue recognition

B  after expense recognition and after revenue recognition

C  before expense recognition and after revenue recognition

D  after expense recognition and before revenue recognition

A  $7,000

B  $5,000

C  $12,000

D  $6,000

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

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

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

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

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

B  make assets equal liabilities plus owners’ equity.

C  recognize all revenues earned during the period.

D  ensure debits equal credits.