Ferg Acctg Bellringer 18 Financial

Suzie owns a tailoring shop and was recently contracted to create a wedding dress for $6,500. What type of accounting method does she use if she does not record anything for this transaction until she receives cash in hand?

• Cash basis

• Accrual basis

• Currency basis

• Credit basis

Which of these is an example of a deferred expense?

• Suzie pays her insurance bill one year in advance.

• Suzie uses her bank's auto pay feature to pay her cable bill each month.

• Suzie pays her rent each month.

• Suzie pays for her music lessons 30 days after the bill arrives.

Suzie received a bill at the end of the second quarter, which she will not pay until the third quarter. What type of account adjustment is this?

• Accrued expense

• Accrued revenue

• Deferred revenue

• Deferred expense

Which method of accounting does an excellent job matching revenues and a poor job tracking cash flow because it recognizes income before it is received and expenses before they're paid?

• Accrual basis

• Cash basis

• Credit basis

• Currency basis

Which type of accounts have balances that are not carried over from one accounting period to another?

• Temporary

• Adjusted

• Short-term

• Permanent

Suzie is an accountant making a debit entry to the income summary account and a credit entry to the retained earnings account. What is she doing?

• Closing the income summary account

• Opening the income summary account

• Creating a permanent account

• Creating a REID account

Which financial statement details dividends, retained earnings, and current retained earnings?

• Retained earnings statement

• Owner's equity statement

• Reserved earnings statement

• Income statement

Which of these would be classified as an accrued revenue account adjustment?

• Suzie sold a wedding dress for $2,400, and the invoice is due to be paid in 60 days.

• Suzie paid cash for a wedding dress the day before her wedding.

• Suzie bought materials for a wedding dress for $2,400, and the invoice is due in 60 days.

• Suzie sold a wedding dress for $2,400, and the invoice is due when presented.

The account that tracks the amount of money taken out for the owner's personal use is called the _____.

• Drawing account

• Liability account

• Asset account

• Permanent account

Which of the following entities established the time period principle?

• Financial Accounting Standards Board

• US Internal Revenue Service

• US General Accounting Office

• Fiscal Advisory Board