
Understanding Balance Day Adjustments
Authored by Shane Wicks
Business
12th Grade
Used 1+ times

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8 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary purpose of balance day adjustments in accounting?
To increase the profit of a business
To ensure that all income and expenses are recorded in the correct accounting period
To reduce the amount of tax payable
To improve the appearance of financial statements
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is an example of a balance day adjustment?
Recording a cash sale
Depreciating a fixed asset
Paying off a loan
Issuing new shares
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does an accrued expense affect the financial statements?
It increases assets and decreases liabilities
It decreases assets and increases liabilities
It increases liabilities and decreases equity
It increases expenses and increases liabilities
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a characteristic of a prepaid expense?
It is an expense that has been incurred but not yet paid
It is an expense that has been paid but not yet incurred
It is an income that has been earned but not yet received
It is an income that has been received but not yet earned
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the effect of recognising depreciation on the financial statements?
Increases assets and decreases expenses
Decreases assets and increases expenses
Increases liabilities and decreases equity
Decreases liabilities and increases equity
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is an example of an accrued revenue?
Rent received in advance
Interest earned but not yet received
Salaries paid in advance
Inventory purchased on credit
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which journal entry correctly records an accrued expense at the end of the accounting period?
Debit Expense, Credit Cash
Debit Expense, Credit Accrued Liabilities
Debit Accrued Liabilities, Credit Expense
Debit Cash, Credit Expense
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