A
What is a trial balance?
List of accounts and their balance at a given time
What is the purpose of a general journal?
To chronologically list transactions and other events expressed in terms of debits and credits to accounts.
One asset goes up, another asset goes down.
Debit: Cash
Credit: A/R
Contra Account
What is a common name for any "Accumulated Depreciation" asset account?
Why is converting from cash basis to accrual basis important?
To conform with GAAP
How does a company makes entries in the recording process?
Debit and Credit
What are the four parts of each general journal entry? (How does it look like)
The accounts and amounts to be debited
The accounts and amounts to be credited
A date
An explanation
What are the two deferral subcategories?
Prepaid Expenses & Unearned Revenues
When do we determine and post adjusting entries?
At the end of every fiscal period for preparing financial statements
What types of accounts may be affected by Adjusting Entries?
Assets, Liabilities, Revenues, Expenses and/or Owner's Equity
To provide accurate information about the financial position of a company
The objective of financial statements is...
Step 7 in the accounting process
What step number is preparing the "financial statements"
What do the adjusting entries ensure?
Companies are following the revenue recognition and expense recognition
Number of months paid for in advance
What is the prepaid expense for Rent or Insurance?
Total Revenues for the fiscal year of $_____ less Total Expenses for the year of $30,000 = Net Loss of $5,000, closed to Owner's Equity.
What is $25,000?
The adjusted trial balance
What is prepared to make sure the debits equal the credits?
Prepare the right entry for the following transaction:
09-7: Services are performed and the client is billed for $10,000.
Accounts Receivable 10,000
Services 10,000
What are the two Accrual subcategories?
Accrued Revenues & Accrued Expenses
What accounts are used for Net Income?
Revenues and Expenses
Dr. Office supplies expense Cr. Office supplies
What is the adjusting entry to record usage of office supplies at the end of a fiscal period?
What are the basic steps in the accounting cycle?
Identifying and measuring transactions and other events
Journalizing
Posting
Preparing an unadjusted trial balance
Making adjusting entries
Preparing an adjusted trial balance
Preparing financial statements
closing
If you purchased office supplies for $1,800 and paid $1,400 Cash while the rest remained outstanding, what should you debit and credit?
Debit office supplies and credit cash and accounts payable.
A company fails to record the entry to accrue utilities expense. On the financial statements this results in a ______ of net income and _______ of liabilities
Overstatement; understatement
What accounts are used to find Retained Earnings?
Net Income and Dividends
Over Time or by Usage
What are two ways that prepaid expenses are allocated to expense?