30 Dec Statement of retained

Question 1

3 / 3 pts

(TCO 2) The debt created by a business when it makes a purchase on account is a(n)

revenue.

prepaid expense.

account receivable.

account payable.

Question 2

3 / 3 pts

(TCO 2) A company performed services for a customer for cash. This transaction increased assets and

decreased equity.

increased liabilities.

increased expenses.

increased revenues.

Question 3

3 / 3 pts

(TCO 2) A company performs services for a client on account. When the company receives the cash from the customer 1 month later

a revenue account is increased.

a liability account is decreased.

an asset account is increased.

an expense account is decreased.

Question 4

3 / 3 pts

(TCO 2) An important rule to remember when working with T-accounts is

when you debit an account, you are entering an amount of the right-hand side of the T-account.

an increase to accounts payable will be recorded as a debit.

to credit an account means to enter an amount on the right-hand side of the T-account.

the debit side of a T-account is on the right-hand side of the T-account for liabilities and revenues.

Question 5

3 / 3 pts

(TCO 2) An account is increased by a debit and has a debit balance. This account is

an expense account.

a liability account.

an asset account.

both an expense account and an asset account.

Question 6

3 / 3 pts

(TCO 2) The process of copying the information from the journal to the ledger is called

posting.

summarizing.

journalizing.

preparing the financial statements.

Question 7

3 / 3 pts

(TCO 3) Under accrual accounting, revenue is recorded

when the cash is collected, regardless of when the services are performed.

when the services are performed, regardless of when the cash is received.

either when the cash is received or the sale is made.

only if the cash is received at the same time the services are performed.

Question 8

3 / 3 pts

(TCO 3) The revenue principle requires that a business record revenue when the business

receives an order from a customer.

prepares the invoice for the customer.

delivers goods or services to a customer.

receives payment from a customer.

Question 9

3 / 3 pts

(TCO 3) In what order are financial statements generally prepared?

Balance sheet, income statement, and statement of retained earnings

Income statement, statement of retained earnings, and balance sheet

Income statement, balance sheet, and statement of retained earnings

Statement of retained earnings, balance sheet, and income statement

Question 10

3 / 3 pts

(TCO 3) Closing entries

are made at the beginning of each accounting period.

prepare the accounts for the next period’s transaction.

cannot be done using a computer.

are the same as adjusting entries.