Chapters 3-4 Review - Exam 1

Adjusting Entries

200

accruals/deferrals occur when cash is exchanged first and the revenue/expense recognition happens later.

deferrals

400

accruals/deferrals occur when the revenue/expense is recognized first and cash is exchanged later.

accruals

600

Accrual-basis accounting helps us reconcile ________ differences that cash-basis accounting is prone to.

Hint: when do things get recorded w/ accruals and deferrals?

timing

Closing Entries

200

Name the three accounts that get closed out at the end of every accounting period.

revenues, expenses, dividends

400

Expenses cause retained earnings (and therefore stockholders' equity) to increase/decrease.

Revenues cause retained earnings (and therefore stockholders' equity) to increase/decrease.

expenses - decrease

revenues - increase

600

Dividends cause retained earnings (and therefore stockholders' equity) to increase/decrease.

dividends - decrease