TTU ACCT 2300 Exam 2 Questions with Correct Answers Latest Update 2025/2026
According to U.S. GAAP, when should revenue be recognized? - Answers When the service is
performed or the goods have been delivered to the customer
On January 1 of the current year, Aladdin Company paid $1,800 in rent to cover six months
(January—June). Aladdin recorded this transaction as follows: - Answers a credit to Prepaid
Rent for $300.
A major purpose of preparing closing entries is to - Answers update the Retained Earnings
account.
Which of the following transactions would be recorded if using the accrual basis of accounting
but not if using the cash basis of accounting? - Answers Purchasing inventory on account
A journal entry would need to be made for which of the following adjustments on a bank
reconciliation? - Answers Bank service charges
In a bank reconciliation, an EFT cash payment is - Answers deducted from the book balance.
What is the effect on the financial statements of recording depreciation on equipment? -
Answers Net income, assets, and stockholders' equity are all decreased.
In a bank reconciliation, interest revenue earned on your bank balance is - Answers added to the
book balance.
How are the assets and liabilities ordered on the balance sheet? - Answers Based on liquidity
(most liquid to least liquid)
Which of the following assets are not included in "cash equivalents" in a typical balance sheet? -
Answers Certain very low-risk equity securities
What type of account is Unearned Revenue? - Answers Liability
An adjusting entry recorded June salary expense that will be paid in July. Which statement best
describes the effect of this adjusting entry on the company's accounting equation? - Answers
Assets are not affected, liabilities are increased, and stockholders' equity is decreased.
Salary Payable at the beginning of the month totals $30,000. During the month, salaries of
$125,000 were accrued as expense. If ending Salary Payable is $15,000, what amount of cash
did the company pay for salaries during the month? - Answers $140,000
Jenna Newbury began a music business in July 2018. Newbury prepares monthly financial
statements and uses the accrual basis of accounting. The following transactions are Newbury
Company's only activities during July through October:
Jul 14 - Bought music on account for $65, with payment to the supplier due in 90 days.
According to U.S. GAAP, when should revenue be recognized? - Answers When the service is
performed or the goods have been delivered to the customer
On January 1 of the current year, Aladdin Company paid $1,800 in rent to cover six months
(January—June). Aladdin recorded this transaction as follows: - Answers a credit to Prepaid
Rent for $300.
A major purpose of preparing closing entries is to - Answers update the Retained Earnings
account.
Which of the following transactions would be recorded if using the accrual basis of accounting
but not if using the cash basis of accounting? - Answers Purchasing inventory on account
A journal entry would need to be made for which of the following adjustments on a bank
reconciliation? - Answers Bank service charges
In a bank reconciliation, an EFT cash payment is - Answers deducted from the book balance.
What is the effect on the financial statements of recording depreciation on equipment? -
Answers Net income, assets, and stockholders' equity are all decreased.
In a bank reconciliation, interest revenue earned on your bank balance is - Answers added to the
book balance.
How are the assets and liabilities ordered on the balance sheet? - Answers Based on liquidity
(most liquid to least liquid)
Which of the following assets are not included in "cash equivalents" in a typical balance sheet? -
Answers Certain very low-risk equity securities
What type of account is Unearned Revenue? - Answers Liability
An adjusting entry recorded June salary expense that will be paid in July. Which statement best
describes the effect of this adjusting entry on the company's accounting equation? - Answers
Assets are not affected, liabilities are increased, and stockholders' equity is decreased.
Salary Payable at the beginning of the month totals $30,000. During the month, salaries of
$125,000 were accrued as expense. If ending Salary Payable is $15,000, what amount of cash
did the company pay for salaries during the month? - Answers $140,000
Jenna Newbury began a music business in July 2018. Newbury prepares monthly financial
statements and uses the accrual basis of accounting. The following transactions are Newbury
Company's only activities during July through October:
Jul 14 - Bought music on account for $65, with payment to the supplier due in 90 days.
