Week 8 Study Guide 1 - Lecture notes 8 PDF

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This is a study guide for the week 8 lecture....

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The closing entry for Service Revenue includes: A debit to Service Revenue and a credit to Retained Earnings.

Which of the following accounts are listed in a post-closing trial balance? Supplies and Retained Earnings

The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as accrual-basis accounting

Under cash-basis accounting, (Select all that apply.) expenses are recorded when cash is paid. AND revenues are recorded when cash is received.

A primary purpose of adjusting entries is to record events that have occurred but that have not yet been recorded.

True or false: Adjusting entries ensure that assets in the balance sheet are reported at amounts that have been used up or expired during the period. False

_______-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. (Enter only one word.) Accrual

A prepayment is originally recorded as an asset. An adjusting entry at the end of the accounting period results in a(n) ______ in the asset account and a(n) ______ in the expense account. decrease, increase

Adam Corporation uses the cash-basis of accounting. Adam Corporation should record expenses when: paid

After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies: used during the accounting period

Upgrade to remove ads Only $0.99/month Adjusting entries are made at the ________ unavailable correct of the accounting period, while daily transactions are made throughout the accounting period. (Enter one word per blank.) end

Depreciation is an allocation of the _____ unavailable correct of buildings, vehicles, and equipment to expense over time as they are used. (Enter one word per blank.) cost

Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period. asset

Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? (Select all that apply.) A company pays for 4 months of advertising in the Wall Street Journal on November 1. AND A company pays a 6-month insurance premium at the beginning of October.

Costs of assets acquired in one period that will be recorded as expense in a future period are referred to as ______ and are initially recorded as _____. prepaid expenses, assets

_____ revenue arises when a business receives cash in one period, but does not provide all of the related goods or services until a later period. (Enter only one word.) Deferred

Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. Decreased, increased

The process of allocating the cost of an asset to expense over the useful life of the asset is called Depreciation

On April 1, Katie Inc. collected $2,400 from a customer for a 12-month membership starting on that date. On December 31, Katie Inc. should credit: Service revenue for 1800

If an adjusting entry's credit is to a liability account, then the debit must be to ______. expense

Upgrade to remove ads Only $0.99/month Deferred revenue is a(n) ______. liability

Which of the following statements describes the effect that adjusting entries may have on liabilities? Adjusting entries increase liabilities for the amount of any accrued and unpaid expenses at the end of the period.

After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies: used during the accounting period

Andy records an adjusting entry for deferred revenue. Andy should: (Select all that apply.)

Debit liability, credit revenue

_____ is defined as the "cost of borrowing money." (Enter one word per blank) Interest

An adjusting entry for accrued expenses involves: (Select all that apply.) Debit to expense, credit to liability

How do adjusting entries for accrued expenses affect liabilities and expenses? Adjusting entries for accrued expenses can increase liabilities and increase expenses.

An adjusting entry is necessary to record interest expense at year-end because the interest: has already been incurred

In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. an asset is increased since cash will be collected at a later date

If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? (Select all that apply.) Liability, prepaid expense

Adjusting entries for accrued expenses ensure that liabilities are reported for all amounts ______ at the end of the accounting period owed

To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for _____ entries. adjusting

Andy records an adjusting entry for deferred revenue. Andy should: (Select all that apply.)

Debit revenue, credit liability

The adjusting entry for an accrued revenue always includes: (Select all that apply.) Debit to asset, credit to revenue

In an adjusting entry for expenses incurred but not yet paid ______. a liability is increasing since cash will be paid in the future due to the expense incurred

At year-end, companies that utilize accrual-based accounting systems complete the measurement process through adjusting entries

The two major categories reported in the income statement are: revenues and expenses

The adjusting entry for a deferred revenue includes a debit to a(n) Input Field 1 of 2 liability unavailable correct account and a credit to a(n) Input Field 2 of 2 revenue unavailable correct account. (Enter only one word per blank.) liability and revenue

Which financial statement would report all of the following information: beginning balances for common stock and retained earnings; current period net income or loss; current period dividends; common stock issued during the year; ending balances of common stock and retained earnings? Statement of Stockholders Equity

Norbert Inc. delivered goods and services during December. Payment is expected during the first week of January. The related adjusting entry should consist of a debit to a(n) ____ account and a credit to a(n) _____ account. asset, revenue

A classified balance sheet shows subtotals for current ______ and current ______(Enter one word per blank)

asset, liabilities

Revenues and expenses are reported in the: income statement

Which of the following statements regarding the statement of cash flows are correct? Reports cash receipts, AND cash dispersements, AND prepared last

The statement of stockholders' equity includes these amounts: dividends for the period, ending balance retained earnings, net income

A classified balance sheet ______ groups asset and liabilities into current and long-term categories...