Accounting Chapter 21

Accounting procedures require that revenue and expenses be recorded in the accounting period in which revenue is earned and expenses are incurred.

• True

• False

To record revenue that has been earned but not yet received, an adjusting entry is made at the beginning of the new fiscal period.

• True

• False

The procedure to calculate accrued interest income is to multiply principal times interest rate times time as fraction of year.

• True

• False

The adjusting entry for accrued interest income results in a debit to Interest Income.

• True

• False

The interest receivable account balance appears on a company's balance sheet as a current asset.

• True

• False

The journal entry to close Interest Income results in a debit entry to Income Summary.

• True

• False

The reversing entry for accrued interest income results in a credit entry to Income Summary.

• True

• False

The reversing entry for accrued interest income results in a debit balance in the interest income account.

• True

• False

When a note receivable is collected, Cash is credited for the total amount received.

• True

• False

Accrued expenses are recorded by an adjusting entry at the beginning of the fiscal period.

• True

• False