ACCT 2000 LSU Exam 2 Questions
and Answers 2025/2026 Updated.
Periodicity Assumption - Answer requires accountants to divide the economic life of a
business into artificial time periods
Revenue Recognition Principle - Answer companies recognize revenue in the accounting
period in which it is earned
Expense Recognition Principle - Answer Expenses are matched with revenues in the period
when efforts are expended to generate revenues
Accrual-Basis Accounting - Answer - transactions recorded in the periods in which the events
occur
- revenues are recognized when earned, even if cash was not received
- Expenses are recognized when incurred, even if cash was not paid
Cash-Basis Accounting - Answer - Revenues are recognized only when cash is received
- expenses are recognized only when cash is paid
- Not allowed under generally accepted accounting principles
Adjusting entries make it possible to - Answer report correct amounts on the balance sheet
and on the income statement
A company makes adjusting entries when? - Answer every time they prepare financial
statements
Adjusting entires include - Answer one income statement account and one balance sheet
account
When doing adjusting entires you must make sure which rules are followed? - Answer
revenue and expense principles
, Prepaid expense adjusting entry - Answer results in an increase a debit to and expense
account and a decrease a credit to an asset account
Accumulated depreciation-equipment is what type of accounts? - Answer contra asset
account
Contra asset accounts appear - Answer just after the account it offsets (equipment) on the
balance sheet
Unearned revenue adjusting entry records - Answer the revenue that has been earned and
to show the liability
Unearned revenue adjusting entry results in - Answer a decrease (a debit) to a liability
account and an increase (a credit) to a revenue account
Accured revenue - Answer revenues earned but not yer received in cash or recorded
Accured expenses - Answer expenses incurred but not yet paid in cash or recorded
Accured revenue adjusting entry shows - Answer the receivable that exists and records the
revenue earned
debit asset (receivable), credit revenue
Accrued Expenses adjusting entry shows - Answer the adjusting entry which records the
liability (payable) and recognizes the expense
debit expense, credit payable
When is the trial balance prepared? - Answer after all adjusting entries are journalized and
posted and is prepared from the ledger (T-accounts)
What is the purpose of the adjusted trial balance? - Answer is to prove the equality of debit
balances and credit balances in the ledger
and Answers 2025/2026 Updated.
Periodicity Assumption - Answer requires accountants to divide the economic life of a
business into artificial time periods
Revenue Recognition Principle - Answer companies recognize revenue in the accounting
period in which it is earned
Expense Recognition Principle - Answer Expenses are matched with revenues in the period
when efforts are expended to generate revenues
Accrual-Basis Accounting - Answer - transactions recorded in the periods in which the events
occur
- revenues are recognized when earned, even if cash was not received
- Expenses are recognized when incurred, even if cash was not paid
Cash-Basis Accounting - Answer - Revenues are recognized only when cash is received
- expenses are recognized only when cash is paid
- Not allowed under generally accepted accounting principles
Adjusting entries make it possible to - Answer report correct amounts on the balance sheet
and on the income statement
A company makes adjusting entries when? - Answer every time they prepare financial
statements
Adjusting entires include - Answer one income statement account and one balance sheet
account
When doing adjusting entires you must make sure which rules are followed? - Answer
revenue and expense principles
, Prepaid expense adjusting entry - Answer results in an increase a debit to and expense
account and a decrease a credit to an asset account
Accumulated depreciation-equipment is what type of accounts? - Answer contra asset
account
Contra asset accounts appear - Answer just after the account it offsets (equipment) on the
balance sheet
Unearned revenue adjusting entry records - Answer the revenue that has been earned and
to show the liability
Unearned revenue adjusting entry results in - Answer a decrease (a debit) to a liability
account and an increase (a credit) to a revenue account
Accured revenue - Answer revenues earned but not yer received in cash or recorded
Accured expenses - Answer expenses incurred but not yet paid in cash or recorded
Accured revenue adjusting entry shows - Answer the receivable that exists and records the
revenue earned
debit asset (receivable), credit revenue
Accrued Expenses adjusting entry shows - Answer the adjusting entry which records the
liability (payable) and recognizes the expense
debit expense, credit payable
When is the trial balance prepared? - Answer after all adjusting entries are journalized and
posted and is prepared from the ledger (T-accounts)
What is the purpose of the adjusted trial balance? - Answer is to prove the equality of debit
balances and credit balances in the ledger
