7451 Accounting Process Flashcards
Week 1 (20 cards)
Which is done first in the accounting process considering the following?
A. Financial statements are prepared.
B. Nominal accounts are closed
C. Adjusting entries are recorded.
D. A postclosing trial balance is prepared.
C. Adjusting entries are recorded.
Debits
A. Increase assets and decrease expenses, liabilities, revenue and equity.
B. Increase assets and expense and decrease liabilities, revenue and equity.
C. Increase liabilities, revenue and equity and decrease assets and expenses
D. Increase assets and equity and decrease liabilities and revenue
B. Increase assets and expense and decrease liabilities, revenue and equity.
A general journal
A. Chronologically lists transactions and other events in terms of debit and credit
B. Contains one record for each asset, liability, equity, revenue and expense
C. Lists all increases and decreases in each account in one place
D. Contains only adjusting entries and closing entries
A. Chronologically lists transactions and other events in terms of debit and credit
Which is not a possible combination of a journal entry?
A. Increase in asset and increase in liability
B. Decrease in equity and increase in liability
C. Decrease liability and decrease in asset
D. Increase in asset and decrease in equity
D. Increase in asset and decrease in equity
Posting is the process of transferring information from
A. Source document to the journal
B. Journal to the source document
C. Journal to the general ledger
D. General ledger to the journal
C. Journal to the general ledger
A general ledger is defined as
A. A group of transactions
B. A group of real accounts
C. A group of nominal accounts
D. The entire group of accounts
D. The entire group of accounts
A trial balance may prove that debits and credits are equal, except
A. An amount could be entered in the wrong account.
B. A transaction could have been entered twice.
C. A transaction could have been omitted.
D. All of these may prove that debits and credits are equal.
D. All of these may prove that debits and credits are equal.
Adjusting entries affect
A. One nominal account and one real account
B. Two nominal accounts
C. Two real accounts
D. No particular combination of nominal and real accounts
A. One nominal account and one real account
What is the adjusting entry for ending inventory?
A. Debit ending inventory and credit beginning inventory
B. Debit beginning inventory and credit ending inventory
C. Debit ending inventory and credit income summary
D. Debit income summary and credit ending inventory
C. Debit ending inventory and credit income summary
What is the adjusting entry for doubtful accounts?
A. Debit doubtful accounts and credit accounts receivable
B. Debit doubtful accounts and credit allowance for doubtful accounts.
C. Debit allowance for doubtful accounts and credit doubtful accounts.
D. Doubtful accounts do not require an adjusting entry.
B. Debit doubtful accounts and credit allowance for doubtful accounts.
What is the adjusting entry for depreciation?
A. Debit depreciation and credit asset
B. Debit asset and credit accumulated depreciation
C. Debit depreciation and credit accumulated depreciation
D. An adjusting entry is not required for depreciation
C. Debit depreciation and credit accumulated depreciation
What is the adjusting entry for accrued expenses?
A. Debit accrued expenses and credit expense.
B. Debit expenses and credit accrued expense
C. Debit expenses and credit income
D. No need to adjust accrued expense.
B. Debit expenses and credit accrued expense
Accrued Expense = liab
What is the adjusting entry for prepaid expenses assuming the expense method is used?
A. Debit prepaid expenses and credit expenses.
B. Debit expenses and credit prepaid expenses
C. Debit prepaid expenses and credit accrued expense
D. It is not necessary to adjust prepaid expenses.
A. Debit prepaid expenses and credit expenses.
Expense xx
Cash xx
Entry for payment
What is the adjusting entry for accrued income?
A. Debit accrued income and credit income
B. Debit income and credit accrued income
C. Debit accrued income and credit accrued expenses
D. No adjusting entry
A. Debit accrued income and credit income
Accrued Income = Asset
What is the adjusting entry for prepaid expenses assuming the asset method is used?
A. Debit prepaid expenses and credit accrued expenses
B. Debit expenses and credit accrued expenses
C. Debit expenses and credit prepaid expenses
D. No adjusting entry
C. Debit expenses and credit prepaid expenses
Prepaid Expense xx
Cash xx
Entry for payment
What is the adjusting entry for unearned income if the income method is used?
A. Debit unearned income and credit income
B. Debit income and credit unearned income
C. Debit accrued income and credit unearned income
D. No adjusting entry
B. Debit income and credit unearned income
Cash xx
Income xx
Entry for receipt
What is the adjusting entry for unearned income if the liability method is used?
A. Debit income and credit unearned income
B. Debit accrued income and credit unearned income
C. Debit unearned income and credit income
D. No adjusting entry
C. Debit unearned income and credit income
Cash xx
Unearned Income xx
Entry for receipt
Closing entries are
A. Made at the end of accounting period
B. Prepared after adjusting entries and financial statements have been prepared
C. Prepared for the purpose of reducing all nominal accounts to zero
D. All choices are correct about closing entries
D. All choices are correct about closing entries
Reversing entries apply to
A. All adjusting entries
B. All deferrals
C. All accruals
D. All closing entries
C. All accruals
A reversing entry should never be made for an adjusting entry that
A. Accrues unrecorded revenue
B. Accrues unrecorded expenses
C. Adjusts expired costs from an asset account to an expense account
D. Adjusts unexpired costs from expense account to an asset account
C. Adjusts expired costs from an asset account to an expense account
