Chapter 3
Chapter 4
100

Name 3 accounts that have credit balances

1. Liabilities

2. Owners equity

3. Revenue

100

 Which assumption states that a company is divided into artificial time periods? 

Periodicity assumption

200

Name 3 type of accounts that have debit balances

1.Dividends

2. Expenses

3. Assets

200

What is the difference between cash basis and accrual accounting? 

Cash- recognize revenue when cash is received and expenses when cash is paid

Accrual- recognize revenue when service is performed and recognize expenses when it is incurred, even if no cash was paid 

300

What is the correct sequence for recording a transaction? 

1.Analyze the transaction

2. Journal the transaction

3. Transfer the journal entry to the ledger through posting

300

Name 3 important characteristics of adjusting entries? 

1. Never include cash

2. Must have a balance sheet and income statement account

3. Ensure revenue and expense recognition principles are followed

400

What is the journal entry when a company announces that they will be hiring 5 new Human Resources agents? 

NO JOURNAL ENTRY 

400

What is the difference between a deferral and an accrual? 

Deferral- dollar before the action ex.) prepaid expenses and unearned revenue

Accrual- action before the dollar ex.) accrued revenues and expenses 

500

What is the journal entry to  record an insurance policy that costs $10,000 on account

Debit to Prepaid Insurance

Credit to Accounts Payable

500
On October 1st, 2017 ABC company purchased an insurance policy that was priced at $720 for the year. Coverage began on October 1. What is the adjusting entry that would appear on December 31st, 2017? 
Debit to insurance expense and credit to prepaid insurance for $180
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