Acct 1 Gateway - Unit 2 Test Review

The accounting period used for the annual financial statements is called the fiscal year.

• True

• False

Prepaid Rent is an expense account that appears on the income statement.

• True

• False

A contra account's normal balance (debit or credit) is the opposite of the normal balance of the related account.

• True

• False

The entry to record depreciation includes a debit to the ________ account.

• Equipment

• Cash

• Accumulated Depreciation

• Depreciation Expense

Which of the following is a contra account?

• Depreciation Expense

• Accumulated Depreciation

• Unearned Revenue

• Book Value

Which financial statement is prepared last?

• income statement

• balance sheet

• statement of owner's equity

• The financial statements can be prepared in any order.

Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the business's normal operating cycle if the cycle is longer than a year, are called ________

• plant

• long-term

• current

• intangible