True and False

used up over time is an example of True and False Questions: 1. To record a prepaid insurance policy as being used up over time is an an external transaction. The purpose of adjusting accounts at the end of a period is to recognia unrecorded revenues and expenses. 3. Preparing financial statements monthly, quarterly and/or annually of the matching principle. and/or annually is an example Generally Accepted Accounting Principles. cash basis accounting is preferred over accrual basis accounting accrual basis accounting due to the 5. Assets being on the left and Liabilities and Equity on the right is of the report form balance sheet. Equity on the right is a characteristic 6. The adjusted trial balance is a list of accounts and balances al entries have been recorded. S and balances after the adjusting 7. Adjusting entries only impact on cash when preparing adju reconciliations. en preparing adjusting entries for bank 8. An adjusting entry for accrued revenues will increase an asseta receivable and increase a revenue account. increase an asset account usually a 9. An adjusting entry for accrued expenses will increase an expense account and decrease a liability account. 10. An adjusting entry for unearned revenue will decrease a liability account and increase an asset account. 11. The book value of an asset is the difference between the historical cost of the asset and the accumulated depreciation. 12. When recording a depreciation adjusting entry an expense account and a contra asset account are affected. 13. An adjusting entry for prepaid expenses will decrease an asset account and increase an expense account. 14. The matching principle aims to match the expenses for a period with the revenues for the same period. 15. Interim financial statements may be prepared monthly, quarterly or semi-annually