Intermediate Accounting Exam 1: Chapters
1, 2, 3, 4 UPDATED Exam Questions and
CORRECT Answers ONLY
transactions recorded under accrual accounting - Correct Answer- Records revenues when
earned and expenses when incurred
debit and credit - Correct Answer- the left and right side of an account, does not imply
increases or decreases
normal balance - Correct Answer- the expected balance in an account, the side that increases
the value of the account
cash basis accounting - Correct Answer- companies only recognize revenue when cash is
received and expenses when cash is paid
temporary accounts - Correct Answer- income statement accounts, dividends
permanent accounts - Correct Answer- balance sheet accounts
four closing entries for temporary accounts - Correct Answer- REVENUE:
Debit revenue and gain accounts
Credit Income summary
EXPENSE:
Debit Income summary for total expenses
Credit each expense
INCOME SUMMARY:
Debit income summary
Credit retained earnings (net income)///
Debit retained earnings
Credit income summary (net loss)
1, 2, 3, 4 UPDATED Exam Questions and
CORRECT Answers ONLY
transactions recorded under accrual accounting - Correct Answer- Records revenues when
earned and expenses when incurred
debit and credit - Correct Answer- the left and right side of an account, does not imply
increases or decreases
normal balance - Correct Answer- the expected balance in an account, the side that increases
the value of the account
cash basis accounting - Correct Answer- companies only recognize revenue when cash is
received and expenses when cash is paid
temporary accounts - Correct Answer- income statement accounts, dividends
permanent accounts - Correct Answer- balance sheet accounts
four closing entries for temporary accounts - Correct Answer- REVENUE:
Debit revenue and gain accounts
Credit Income summary
EXPENSE:
Debit Income summary for total expenses
Credit each expense
INCOME SUMMARY:
Debit income summary
Credit retained earnings (net income)///
Debit retained earnings
Credit income summary (net loss)
