Accounting Quiz for Session 6

Which of these is an ASSET account?

• Accounts Receivable

• Retained Earnings

• Accounts Payable

• Common Stock

Which of the following is a liability account?

• Supplies

• Dividends

• Notes Payable

• Buildings

TRUE OR FALSE: For each transaction, you should always debit at least one account and credit at least one other account.

• True

• False

Dividends ____ Stockholders Equity

Under Cash Basis Accounting:

• Revenues and expenses are recorded only when cash is exchanged.
• Cash transactions are ignored in this accounting method.
• Expenses are recorded when incurred, not when paid.
• Revenues are recorded when earned, regardless of cash exchange.

Under Accrual Basis Accounting: If you receive cash in advance for a service, you...

• Record the Revenue as Cash

• Do not record the revenue at all

• Record as Deferred Revenue until service is provided

Under Accrual Basis Accounting: If you pay for rent one year in advance you...

• Wait until the end of the lease term to record it

• Record it all at once in the month of payment.

• Record it as a prepaid expense and recognize it monthly.