Journal Entries
Issuance of $300,000 Common Stock, which account is debited?
Cash (300,000)
Which account is debited to adjust for prepaid rent?
Rent expense
Which account is debited to adjust for salaries expense accrued?
Salaries expense
The closing process comes at which point in the accounting cycle?
Primary objective of financial reporting is to provide information:
that is useful in decision making
Purchase of $40,000 of inventory on account, which account is credited
Accounts payable (40,000)
Which account is credited to adjust for prepaid rent?
Prepaid rent
Which account is credited to adjust for salaries expense accrued (and not paid)?
Salaries payable
Revenues and gains are closed to...
Retained earnings
The two fundamental characteristics that make accounting information useful are:
Relevance and Faithful Representation
Paid $100,000 in cash dividends to shareholders, which account is debited?
Dividends (100,000)
Which account is debited to adjust for depreciation on equipment purchases?
Depreciation expense
Which account is debited to adjust for interest expenses accrued?
Interest expense
What type of accounts need closing entries?
Temporary accounts
A list of the general ledger accounts and their balances at a particular date is a:
trial balance
Paid $5,000 cash for prior inventory purchases on account, which account is credited?
Cash (5,000)
Which account is credited to adjust for depreciation on equipment purchases?
accumulated depreciation
Which account is credited to adjust for interest expenses accrued (and not paid)?
Interest payable
What account would be credited to close sales revenue?
Retained Earnings
the process used to identify, analyze, record, and summarize transactions and prepare financial statements is:
The accounting cycle
Paid $30,000 in advance for six months rent of an office building, which account is debited?
Prepaid Rent (30,000)
Which account is credited to adjust for supplies used?
Supplies
Which account is debited to adjust for interest revenue accrued?
interest receivable
What account would be credited to close rent expense?
Rent expense
The documents that set forth fundamental concepts on which financial accounting and reporting standards will be based are:
Statements of Financial Accounting Concepts