Jackson ACTY 2100 – CA 3.2

The process of allocating the cost of a long-term asset to expense over its useful life refers to:

• Depreciation

• Equipment Expense

• Impairment

• Capitalization

The revenue recognition principle states that:

• Revenue should be recognized in the period that cash is received

• Revenue is a component of Common Stock

• Revenue should be recognized in the balance sheet

• Revenue should be recognized in the period goods and services are provided

Entries that transfer the balances of all temporary accounts to the balance of the Retained Earnings account refers to:

• Adjusting entries

• Journal entries

• Closing entries

• Transfer entries

An accrued expense occurs when:

• Cash is paid but an expense is never recorded

• An expense is recorded at the same time as the cash payment

• Cash payment occurs after the expense is recognized and a liability is recorded

• Cash payment (or an obligation to pay cash) occurs before the expense recognition

An account with a balance that is opposite to that of its related accounts refers to:

• Contra account

• Opposite account

• Inverse account

• Contrast account

The accounting basis that records revenue when goods or services are provided to customers and expenses with related revenue is referred to as:

• Cash basis of accounting

• Reporting basis of accounting

• Accrual basis of accounting

• Matching basis of accounting

Deferred revenues refer to:

• Revenue being recorded at the same time the cash is collected from the customer

• Cash being collected from the customer after the revenue is recorded

• Revenue being recorded prior to cash collection from the customer

• Customers paying cash in advance of the good or service to be provided

Which of the following is not a permanent account?

• Accumulated Depreciation

• Deferred Revenue

• Dividend

• Common Stock

An asset’s original cost less accumulated depreciation refers to:

• Book value

• Purchase price

• Residual value

• Service life

The rules of financial accounting refer to:

• Generally Accepted Auditing Principles

• Financial Accounting Standards Board

• Generally Accepted Accounting Principles

• International Accounting Standards Board