ACCOUNTING COACH 5/17/2024

This accounting principle requires the accrual and deferral of expenses and liabilities.

Under this system every transaction will affect at least two general ledger accounts and the debit amounts must be equal to the credit amounts.

This is a cost that has been paid but it has not yet expired. An example is a six-month insurance premium paid in advance.

This asset is part of property, plant and equipment but it is not depreciated.

This is the main criteria for reporting revenues (and the related asset) under the accrual method of accounting.

This journal is used to record adjusting entries. In the past, this was referred to as the book of original entry.

• General journal

• Journal book

• Balance sheet

Which of the following is not a current asset?

• Inventory

• Prepaid Insurance

• Fixtures

Current asset MINUS current liabilities is the

• Current Ratio

• Net Worth

• Working Capital

The quick ratio EXCLUDES which of the following?

• Accounts Receivable

• Cash

• Inventory

Free cash flow is the cash provided by operating activities minus the cash used by financing activities.

• True

• False