ACC101 NEW SP26 paart 2 – Worksheet Questions Extraction

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

How does Lead Company record the billing of a client for $15,000 of service completed?

The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is:

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

• Current liabilities.

• Long-term liabilities.

• Current assets.

• Operating cycle liabilities.

• Checks/Cheques.

Changes in retained earnings are commonly reported in the:

• Statement of cash flows.

• Balance sheet.

• Statement of retained earnings.

• Income statement.

• No disclosure is required.

Changes in accounting estimates are:

• considered accounting errors.

• reported as prior period adjustments.

• accounted for with a cumulative "catch-up" adjustment.

• extraordinary items.

• accounted for in current and future periods.

Which of the following is NOT a step in the closing process?

• Identify accounts for closing.

• Record and post the closing entries.

• Prepare a post-closing trial balance.

• Reconcile the accounts payable.

• Update the owner's capital account.

A company might buy a service or product on credit. "On credit" implies that the cash payment will occur:

• On buying day.

• on a later date.

• on previous day.

• No due date.

• No obligation to pay.

The accounting principle that requires accounting information to be based on actual cost instead of current value, is the:

• Accounting equation.

• Cost principle.

• On - Going-concern principle.

• Accrual principle.

• Consistency principle.