Question 1

Why are adjusting entries necessary in an accrual accounting system? What are some common examples?

Accepted Answer

Adjusting entries are necessary to update ledger account balances before preparing financial statements in order to recognize revenues and expenses that should be recognized in the current year,but have not yet been recorded.Some common adjusting entries include recognizing accrued salaries expense,accrued interest revenue,and deferred expenses,such as prepaid rent,as well as recognizing revenue that had been previously unearned.

Question 2

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
 
-Banks Co.performed $5,000 of services for customers on account.

Accepted Answer

(I)(N)(I)(I)(N)(I)(N)

Question 3

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
 
-Amity Co.signed contracts for $25,000 of services to be performed in the future.

Accepted Answer

(N)(N)(N)(N)(N)(N)(N)

Question 4

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
 
-Ingstrom Co.provided $2,600 of services for a customer who paid $1,000 cash immediately and promised to pay an additional $1,600 one month later.

Accepted Answer

The answer of Indicate how each event affects the elements...

Question 5

What is the effect on the accounting equation of a cash payment to creditors?

Accepted Answer

The answer of What is the effect on the accounting...

Question 6

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
 
-Todd Co.collected $2,000 cash from accounts receivable.

Accepted Answer

The answer of Indicate how each event affects the elements...

Question 7

Define the accounting cycle and list the stages of the cycle.

Accepted Answer

The answer of Define the accounting cycle and list the...

Question 8

Discuss the importance of ethics in the accounting profession.

Accepted Answer

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Question 9

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
 
-Calloway Company received $750 from a customer for services to be performed at a future date.

Accepted Answer

The answer of Indicate how each event affects the elements...

Question 10

What effect does providing services on account have on the statement of cash flows? The balance sheet?

Accepted Answer

The answer of What effect does providing services on account...

Question 11

What does the balance in accounts receivable represent?

Accepted Answer

The answer of What does the balance in accounts receivable...

Question 12

Explain the meaning of the term,"matching concept."

Accepted Answer

The answer of Explain the meaning of the term,"matching concept."...

Question 13

The temporary accounts are closed prior to the start of the next accounting cycle.In this closing process,the amounts in each of these accounts are transferred to what other account(s)?

Accepted Answer

The answer of The temporary accounts are closed prior to...

Question 14

What effect does the recording of revenue normally have on total assets?

Accepted Answer

The answer of What effect does the recording of revenue...

Question 15

When are expenses recognized under accrual accounting in relation to the payment of cash?

Accepted Answer

The answer of When are expenses recognized under accrual accounting...

Question 16

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.
 
-At the end of the accounting period,Signet Co.recognized accrued salaries.

Accepted Answer

The answer of Indicate how each event affects the elements...

Question 17

Describe the difference between temporary and permanent accounts,and state which ones are closed.

Accepted Answer

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Question 18

When is revenue recognized under accrual accounting?

Accepted Answer

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Question 19

What is the "fraud triangle"?

Accepted Answer

The answer of What is the "fraud triangle"?...

Question 20

Describe the purpose of the closing process.

Accepted Answer

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Quiz 2: Understanding the Accounting Cycle

Why are adjusting entries necessary in an accrual accounting system? What are some common examples?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -Banks Co.performed $5,000 of services for customers on account.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -Amity Co.signed contracts for $25,000 of services to be performed in the future.

What is the effect on the accounting equation of a cash payment to creditors?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -Todd Co.collected $2,000 cash from accounts receivable.

Define the accounting cycle and list the stages of the cycle.

Discuss the importance of ethics in the accounting profession.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -Calloway Company received $750 from a customer for services to be performed at a future date.

What effect does providing services on account have on the statement of cash flows? The balance sheet?

What does the balance in accounts receivable represent?

Explain the meaning of the term,"matching concept."

The temporary accounts are closed prior to the start of the next accounting cycle.In this closing process,the amounts in each of these accounts are transferred to what other account(s)?

What effect does the recording of revenue normally have on total assets?

When are expenses recognized under accrual accounting in relation to the payment of cash?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -At the end of the accounting period,Signet Co.recognized accrued salaries.

Describe the difference between temporary and permanent accounts,and state which ones are closed.

When is revenue recognized under accrual accounting?

What is the "fraud triangle"?

Describe the purpose of the closing process.