Accounting I Chap 3 & 4 review questions 1) In the Accounting cycle, the last step is a) Preparing the financial statements b) Journalizing and posting the adjusting entries c) Preparing a post-closing trial balance d) Journalizing and posting the closing entries 2) Adjusting entries are a) The same as correcting entries b) Needed to bring accounts up to date and match revenue and expense c) Optional under generally accepted accounting principles d) Rarely needed in large companies 3) Tolman industries received its telephone bill in the amount of 900 and immediately paid it. Tolmans general journal entry to record this transaction will include a a) Debit to telephone expense for 900 b) Credit accounts payable for 900 c) Debit cash for 900 d) Credit telephone expense for 900 e) Debit accounts payable for 900 4) Ledewitz rentals purchased office supplies on credit, the general journal entry made will include a a) Debit to account payable b) Debit to accounts receivable c) Credit to cash d) Credit to accounts payable e) Credit to ledewitz, capital 5) Accrual accounting, expenses are recorded and reported only a) When they are incurred, whether or not cash is paid b) When they are incurred and paid at the same time c) If they are paid before they are incurred d) If they are paid after they are incurred 5) Accrual accounting, expenses are recorded and reported only: a) When they are incurred, whether or not cash is paid b) When they are incurred and paid at the same time c) If they are paid before they are incurred d) If they are paid after they are incurred 6) Prepaid insurance is reported on the balance sheet as a a) Current asset b) Fixed asset c) Current liability d) Long-term liability 7) A debit a) Always increases the account b) Is the right hand side of a t account c) Always decreases an account d) Is the left hand side of a t account e) Is not needed to record a transaction