TOPIC 5 ADJUSTMENT: 2nd Quiz

The revenue recognition principle dictates that revenue be recognized in the accounting period in which cash is received.

• TRUE

• FALSE

An adjusting entry always involves two statements of financial position accounts.

• TRUE

• FALSE

Adjusting entries are often made because some business events are not recorded as they occur.

• TRUE

• FALSE

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

• TRUE

• FALSE

Revenue received before services are performed and expenses paid before being used or consumed are both initially recorded as liabilities.

• TRUE

• FALSE

Accrued revenues are revenues which have been received but not yet recognized.

• TRUE

• FALSE

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

• TRUE

• FALSE

Accumulated Depreciation is a liability account and has a normal credit account balance.

• TRUE

• FALSE

A liability—revenue account relationship exists with an unearned rent revenue adjusting entry.

• TRUE

• FALSE

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

• TRUE

• FALSE