KUIS 1

Accrual-Basis Accounting in the bellow is right, except...

• Transactions recorded in the periods in which the events occur

• Companies recognize revenues when they perform services (rather than when they receive cash).

• Expenses recognized when cash is paid

• Expenses are recognized when incurred (rather than when paid).

One of the following statements about the accrual basis of accounting is false?  That statement is:

• Events that change a company’s financial statements are recorded in the periods in which the events occur.

• Revenue is recognized in the period in which the performance obligation is satisfied.

• The accrual basis of accounting is in accord with generally accepted accounting principles

• Revenue is recorded only when cash is received, and expenses are recorded only when cash is paid

Adjusting entries are made to ensure that:

• expenses are recognized in the period in which they are incurred.

• revenues are recorded in the period in which services are performed.

• balance sheet and income statement accounts have correct balances at the end of an accounting period.

• all of the above

Types of Adjusting Entries are...

• Accrual and Cash

• Perpetual and Periodic

• Accrual and periodic

• Defferal and accrual

Adjusting entries for defferals are...

• Prepaid expenses and Accrued Expenses

• Prepaid expenses and Accrued Revenues

• Prepaid expenses and Unearned Revenues

• Prepaid expenses and Interest Revenue

Adjusting entries for Accruals are

• Prepaid Expenses and Unearned Revenues

• Accrued Expenses anda Accrued Revenues

• Prepaid Expenses and Accrued Revenues

• Accrued Expenses anda Unearned Revenues

Reason for adjustmen of prepaid expenses...

• Prepaid expenses recorded in asset accounts have been used

• insurance, supplies, advertising, rent, depreciation

• assets overstated, expenses understated

• unearned revenues recorded in liability accounts are now recognized as revenue for services performed

At the end of the accounting period, the company makes the accounts ready for the next period. What is the account that prepare for closing entries?

• Temporary Account

• Permanent Account

• All Revenue and All Expense

The following statement in the below about worksheet are right, except...

• Multiple-column form used in preparing financial statements.

• not a permanent accounting record

• Use of worksheet is not optional

• Use of worksheet is not mandatory

Closing entries formally recognize in the ledger the transfer of

• net income

• net loss

• owners drawing

• assets