12. Under the new method of accounting, service revenues are reported on the income statement in the period in which an agreement is made on cash is received the services are performed 13. A sale is made with credit terms that allow the customer to pay in 30 days. Under the accrual method of accounting the account to be credited at the time of the sale is Accounts Receivable Cash Sales 14. When the company receives the money from its customer that was billed in the prior month, the company should debit Accounts Receivable Cash Sales moon 15. The account Sales is almost always debited credited oslo bodo n on obvog most be 16. The account Accounts Payable is expected to have this type of balance. credit debit Dono 17. The account Unearned Revenues is expected to have this type of balance. debit credit 18. When a company pays a supplier the amount owed on a previously recorded purchase, Accounts Payable will be debited credited odmood 19. Revenues will cause a company's total amount of owner's equity or stockholders' equity to Increase decrease 20 When a company pays a portion of its Accounts Payable, the total amount of its owner's equity or stockholders' equity will increase decrease not change 21. Assets = Liabilities + Stockholders' Equity is known as the basic accounting equation principle statement 22. The account Retained Earnings will be included in which side of the accounting equation 2 left right For personal use by the original purchaser only. Copyright Accounting Coach.com When a company uses the accrual method and it records interest expense that it incurred but has not yet paid, the effect on the basic accounting equation will be a decrease in Assets and a decrease in Stockholders' Equity a decrease in Assets and also an increase in Assets an increase in Liabilities and a decrease in Stockholders' Equity 24. When an amount in the account Unearned Revenues becomes earned, the amount eamed will be entered in Unearned Revenues as a debit credit moo visno o to AP 25. The accounts that are not closed at the end of the accounting year are the balance sheet accounts income statement accounts both 26. Under the accrual method of accounting, revenues include the sales of products on credit and the fees earned from providing services on credit. True False 27. Under accrual accounting, which of the following is an expense of the current accounting period? Interest on an existing loan even though it will not be paid until next year Paying next year's property insurance in advance Payment for the purchase of land for a new warehouse 28. An advertisement with a cost of $900 is run in the media in December but it will be paid for in January. Under the accrual method of accounting, the $900 cost should be reported as an expense in the month of December January 29. Which of the following accounts will likely see an increase or decrease when a corporation prepares its financial statements at the end of the accounting year? Common Stock Retained Earnings 30. A corporation's balance sheet and income statement are connected through the Retained Earnings account True False