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  prepaid expenses

B  income loss

C  interest expense

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

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

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

A  credit to supplies and debit to supplies expense

B  debit 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 incurred before cash is paid

B  expensed in a later period than cash was paid

C  expenses paid at the time incurred

A  expense, asset

B  asset, expense

C  liability, income

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  debited, credited

B  debited, debited

C  credited, debited

D  credited, credited

A  liabilities …. Revenue

B  asset/s … expense

C  expense … asset/s

A  an asset

B  revenue

C  a liability

D  an expense

A  Expense paid when it is incurred

B  Purchasing supplies that will be used later

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

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

A  True

B  False

A  closing and post-closing.

B  assets and liabilities.

C  increases and decreases.

D  revenues and expenses.

A  offset

B  accruals

C  rebates

A  after the financial statements have been prepared

B  when the financial statements are prepared

C  after closing entries have been prepared

D  at the beginning of an accounting period

A  payables; receivables

B  income; loss

C  assets; liabilities

D  increases; decreases

A  database accounting system

B  double-entry system

C  enterprise resource planning system

A  increases or decreases total assets

B  has a single effect on the accounting equation

C  has a dual effect on the accounting equation

D  increases or decreases income

A  When any external transaction or event occurs.

B  After closing entries are prepared for the period.

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

D  At the beginning of each reporting period.

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

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

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

A  general account

B  bank account

C  dual account

D  T-account

A  has a dual effect on the accounting equation

B  effects only a single account

C  cannot effect more than one account

A  adjusting

B  offset

C  balanced

A  $65,000

B  $125,000

C  $75,000

D  $85,000

E  $165,000

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  direct effect.

B  transaction.

C  investment.

D  indirect effect.

A  operating results of a company

B  operating activities of a company

C  financial position of a company

D  cash position of a company

A  True

B  False

A  considerable

B  dual or double

C  minimal

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  domestic

C  external

A  gains, revenues, losses, and expenses

B  liabilities, revenues, assets, and expenses

C  liabilities, losses, assets, and expenses

A  Enterprise Resource Planning (ERP) system.

B  Electronic Data Processing system.

C  Accounting Data system.

A  after

B  before

C  the same as

A  Close the temporary accounts to retained earnings

B  Obtain information about external transactions from source documents

C  Record adjusting entries and post to the general ledger accounts

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

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.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  must use the one statement approach

B  is not required to report comprehensive income

C  must use the two 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  expense incurred, but not yet paid and revenue earned, but not yet received

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

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

A  paid-in capital and retained earnings

B  current assets. property and equipment

C  current assets and long-term liabilities

D  paid-in capital and long-term liabilities

A  an accrual adjusting entry

B  an estimate adjusting entry

C  a prepayment adjusting entry

A  $24,000

B  $3,000

C  $4,000

D  $12,000

A  Investments

B  Income

C  Liabilities or liability

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

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

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

A  False

B  True

A  current

B  noncurrent

A  before expense recognition and after revenue recognition

B  after expense recognition and before revenue recognition

C  before expense recognition and before revenue recognition

D  after expense recognition and after revenue recognition

A  $5,000

B  $12,000

C  $6,000

D  $7,000

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

B  the total liabilities of the company; the total assets of the company

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

D  the total assets of the company; the total invested in 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.