An obligation of a business that represents the claims of others against the assets of the business is called a(n) *

asset

liability

expense

revenue

equity

The general journal provides a place for recording *

the amount of each debit and credit

an explanation of the transaction

the transaction date

the names of the accounts involved

All of these

An exchange of economic consideration between two parties that causes a change in assets, liabilities or equity is called *

prepaid expenses

external transactions

liabilities.

business transaction

source documents

A balance column ledger account is *

Another name for the withdrawals account

An account with debit and credit columns for recording entries and a third column for showing the balance of the account after each entry is posted

An account entered on the balance sheet

A simple form of account that is widely used in accounting education to illustrate the debits and credits required in recording a transaction

An account used to record the transfers of assets from a business to its owner

Reversing entries are *

Dated the first day of the next accounting period

Optional

Linked to accrued assets and liabilities that were created by adjusting entries at the end of the previous accounting period

All of these

Used to simplify a company's record keeping

Current Liabilities *

Are listed in order of liquidity

Are closed at the end of the accounting period to current assets

Are listed in the order in which they are to be paid, with the first one listed to be paid first

Are due to be settled after one year or the operating cycle

Are due to be settled within the shorter of one year or the operating cycle

Cash investments by owners are listed on which of the following statement(s)? *

Both a statement of changes in equity and statement of cash flows

Statement of changes in equity

Income statement

Balance sheet

Statement of cash flows

The remaining balance in Prepaid Insurance on December 31, 2021 of $12,600 was for a six-month insurance policy purchased for $16,800 and in effect on July 1, 2020. What is the required adjustment amount on December 31st? *

$8,750

$5,000

$2,800

$4,750

$4,500

Which statement is true about liquidity? Prepaid Rent is *

Less liquid that inventories

Less liquid than rent revenue

More liquid than cash

Less liquid than land

More liquid than inventories

A column in journals and accounts used to cross reference journal and ledger entries is called the *

account balance

debit

posting reference

credit

description

The normal order for the asset section of a classified balance sheet is *

Long-term investments, current assets, property, plant and equipment, intangible assets

Current assets, prepaid expenses, long-term investments, intangible assets

Current assets, long-term investments, property, plant and equipment, intangible assets

Property, plant and equipment, intangible assets, long-term investments, current assets

Intangible assets, current assets, long-term investments, property, plant and equipment

A financial statement providing information that helps users understand a company's financial status at a specific date, is called a(n) *

statement of cash flows

statement of changes in equity

bank statement

income statement

balance sheet

A book of original entry is *

Another name for the cash account

A book in which amounts are posted from a journal

Also called a ledger

Another name for the general journal

Sometimes called a book of final entry

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures revenue as the amount of cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services is called the *

business entity principle

currency principle

historical cost principle

going concern principle

recognition principle

Which of the following is not considered a basic type of adjusting entry? *

An entry to accrue uncollected revenue

An entry to convert an asset to a liability

An entry to convert a liability to a revenue

An entry to convert an asset to an expense

An entry to accrue unpaid expenses

If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on January 5 would include *

No entry would be necessary on January 5

A debit to Cash and a credit to Salaries Payable

A debit to Cash and a credit to Prepaid Salaries

A debit to Salaries Payable and a credit to Cash

A debit to Salaries Payable and a credit to Salaries Expense

Salaries paid with cash appear on which of the following statement(s)? *

Statement of changes in equity

Balance sheet

Both an income statement and statement of cash flows

Income statement

Statement of cash flow.

A journal in which transactions are first recorded is *

a revenue account

a book of original entry

a book of final entry

the cash ledger

a ledger

A ledger is *

A journal in which transactions are first recorded

A book of original entry

A book in which a complete record of transactions is recorded and from which transaction amounts are posted to the accounts

Another name for the bank account

A book of final entry

The adjusting entry to record the earned but unpaid salaries of employees at the end of the accounting period is *

Debit Salaries Expense and credit Salaries Payable

Debit Salaries Expense and credit Cash

Debit Unpaid Salaries and credit Salaries Payable

Debit Salaries Payable and credit Salaries Expense

Debit Cash and credit Salaries Expense

A classified balance sheet *

Organizes assets and liabilities into important subgroups

Shows the effect of profit and withdrawals on owner's capital

Shows operating, investing, and financing activities

Presents revenues, expenses and profit

Measures a company's ability to pay its bills on time

The current ratio *

Helps to assess a company's ability to pay its debts in the near future

Suggests there may be problems in a business if it is less than 1

Is a measure of a company's liquidity

All of these

Is current assets divided by current liabilities

Payments of cash by a corporation to its shareholders are called *

expenses

withdrawals

dividends

cheques

shareholder's equity

In January, Denton Mabrey College received $120,000 in Unearned Tuition Revenue from its students for the spring semester, which lasts four months. On January 31, the college should recognize which amount for tuition revenue? *

$60,000

$30,000

$80,000

$90,000

$120,000

Costs incurred or the using up of assets as a result of the main operations of a business are called *

net losses

equity

expenses

revenues

liabilities

A compound journal entry is *

A journal entry that has three or more debits and three or more credits

A journal entry that affects at least three account

A journal entry involving at least two accounting periods

A journal entry involving only two ledger accounts

A journal entry that affects at least four accounts

Welder Company purchases supplies from Plumber Company on account. The entry for this transaction will include a *

Credit to Accounts Payable for Plumber Company

Debit to Accounts Receivable for Welder Company

Credit to Accounts Receivable for Welder Company

Debit to Accounts Receivable for Plumber Company

Debit to Accounts Payable for Welder Company

Which of the following is the final step in the accounting cycle? *

Preparing a post-closing trial balance

Preparing the statements

Preparing a work sheet

Preparing an adjusted trial balance

Journalizing

Which financial statement shows whether the business earned a profit or loss, and also lists the types and amounts of the revenues and expenses? *

Balance sheet

Statement of cash flow

Income statement.

Statement of financial position

Statement of changes in equity

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called *

Prepaid expenses

Operating expense

Accrued expenses

Accounts payable

Unearned expense

HCF, a finance company, lends Able Business $12,000 at 5% on December 1, 2020. HCF's adjusting entry on December 31, 2020, should include *

A debit to Interest Expense for $600

A credit to Interest Earned for $50

A debit to Cash for $600

A credit to Interest Receivable for $50

A debit to Interest Earned for $50

Profit appears on which of the following statement(s)? *

Income statement

Balance sheet

Statement of changes in equity

Statement of cash flows

Both an income statement and statement of changes in equity

The ending balance of owner's capital is calculated as *

Owner's capital account balance minus loss plus the withdrawals account balance

Owner's capital account balance plus profit minus the withdrawals account balance

None of these answers is correct.

Profit minus the withdrawals account balance

Assets plus liabilities

The asset section of a classified balance sheet includes *

Current liabilities, long-term investments, property, plant and equipment, and intangible assets.

Current assets, long-term investments, property, plant and equipment, and intangible assets.

Current assets, liabilities, property, plant and equipment, and intangible assets.

Current assets, non-current assets, equity, and intangible assets.

Current assets, long-term investments, property, plant and equipment, and withdrawals.

The process of copying journal information to the ledger is called *

double-entering

an external business transaction

journalizing

an internal business transaction

posting

Current liabilities become due *

All of these

A or B, whichever is longer

When bills have to be paid

Within the operating cycle of a business

Within one year

On December 1, your company paid its insurance agent $2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. The $2,400 payment was recorded on December 1 with a debit to the income statement account Insurance Expense and a credit to the current asset Cash. Your company prepares monthly financial statements at the end of each calendar month. The entry to be made at the December 31 month end to adjust the accounts is *

Debit Insurance Expense 2400; Credit Prepaid Insurance 2400

Debit Insurance Expense 2200; Credit Prepaid Insurance 2200

Debit Prepaid insurance 2200; Credit Insurance Expense 2200

Debit Insurance Expense 200; Credit Prepaid Insurance 200

Debit Prepaid Insurance 200; Credit Insurance Expense 200

Accrued revenues *

Are also called unearned revenues

Are paid in advance

At the end of one accounting period often result in cash payments in the next period

Are listed on the balance sheet as liabilities

At the end of one accounting period often result in cash receipts from customers in the next period

A business pays each of its two office employees each Friday at the rate of $60 per day for a five-day week that begins on Monday. If the accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the adjusting entry to record the salaries earned but unpaid is *

Debit Office Salaries Expense $240 and credit Salaries Payable $240

Debit Unpaid Salaries $120 and credit Salaries Payable $120

Debit Office Salaries Expense $120 and credit Salaries Payable $120

Debit Salaries Payable $240 and credit Office Salaries Expense $240

Debit Salaries Expense $240 and credit Cash $240

The most flexible type of journal that can be used to record any kind of transaction is called a *

Balance column account

Trial balance

Chart of accounts

Ledger

General Journal