Updated 2025–2026 Test Bank for Intermediate Accounting, 7th Edition — Spiceland, Sepe & Nelson

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Test Bank
,,,,,,,, for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
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, Fullfile at http://testbankscafe.eu/Test-Bank-for-Intermediate-Accounting-7th-Edition-Spiceland,-Sepe,-Nelson
Test Bank
,,,,,,,, for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
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Chapter 0 , , , , , , , ,




2Review of the Accounting Pro
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cess


True , , , , , , , , / , , , , , ,, , False , , , , , , , , Questions


1. Owners' equity canbe expressed asassets minus liabilities. ,, ,, , ,,,, ,,, , ,,, ,,,,,,




True False

2. Debits ,, ,,,,,, increase ,, , ,, ,, , asset , ,, , ,, , , accounts , ,, , ,, , , and , ,,,, ,,, decrease ,,,,,,,, liability ,, , ,, , ,, accounts.

True False

3. Balance sheet accounts are referred , ,,,, ,,, , , ,, , ,, , , ,,, ,, ,, , ,, ,, ,, , ,,,, ,,,, to ,, , ,, , ,, as ,,,,,,,, temporary , ,, , ,, , , accounts , ,, , ,, , , because ,,,,,,,,




their balances are always changing.
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True False

4. After an unadjusted trial balance is prepared, the next step in the acc
, ,,, ,,, , , ,,, ,,, , ,,, ,,, ,, ,, ,, ,,, , ,, ,,, ,,, , ,,, ,,, , , ,,, ,,, , , ,,, ,,, , , ,,, ,,, , , ,,, ,,, , , ,,, ,,, , , ,,, ,,, ,




ountingp rocessing cycle is the preparation of financial statements.
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True False

5. Adjusting journal entries are required to comply with the realization and m
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atchingp rinciples. ,




True False

6. Accruals occur when the cash flow precedes either revenue or expense recog
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nition.

True False

7. The adjusted trial balance contains only permanent accounts.
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True False

8. The income statement summarizes the operating activity of a firm at a
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particularp oint in time. , ,,,,,,,, ,,,,,,,,




True False

, Fullfile at http://testbankscafe.eu/Test-Bank-for-Intermediate-Accounting-7th-Edition-Spiceland,-Sepe,-Nelson
Test Bank,,,,,,,,for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
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9. The balance sheet can be considered a change or flow statement.
, ,, , ,, ,, , , , ,, , , , , ,, , ,, ,, , ,,,,,, , , , ,, , , , , , , , ,, , , , ,, ,,,,,, , ,, ,,, ,, , ,, , ,, , , ,, ,, ,,, ,




True False

10. The statement of cash flows summarizes
, ,, ,,, ,, ,, ,, ,, ,, ,, ,,, ,,, ,,,, ,,, , , ,,, ,,,, ,,, ,, ,, , transactions , , , , , , , , that , ,,,, ,,, caused ,,,,,, ,,




cash to changed uring a reporting period.
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True False

11. The , ,, ,,, ,, statement of shareholders' equity discloses ,,, ,,,, , , ,,, ,,,, ,,,,,,,, , ,,, ,,,, ,,,, ,,, , the , , ,, , , ,, changes ,,, ,,,, , in ,,,,,,,,




the , ,, , ,, , , temporary shareholders' equity accounts. , ,,,,,,,, ,,,,,,,,




True False

12. The post-closing trial balance contains only permanent accounts.
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True False

13. The closing process brings all temporary accounts to
,,,,,,,, ,, ,,,,, , , ,, , ,, ,, , ,, , ,, , , ,,, ,,,, , ,,,,,,,, , ,, , ,, , , , ,, , ,, , , a , ,, ,,, ,, zero , ,, , ,, , , balance ,, ,, ,, ,, a
nd updates thebalance in the retained earnings account.
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True False

14. A reversing entry at the beginning of a period for salaries would include
,, ,, ,, , , , ,,,,,, , , ,,,,, ,, ,,,,,,,, ,, ,,,,, , , , ,, , , ,, ,,,,,,,, ,, , , , ,, , , ,,,,,, , ,,,,,,,, , ,, ,, ,, , ,,,, ,,,, ,, ,,




a debit to salaries expense.
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True False

15. The sale of merchandise on account would be recorded in a sales journal.
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True False

16. The payment of cash to a supplier would be recorded in a purchases journal.
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True False




Multiple Choice Questions , , , ,, , ,, ,,,,,,,,

, Fullfile at http://testbankscafe.eu/Test-Bank-for-Intermediate-Accounting-7th-Edition-Spiceland,-Sepe,-Nelson
Test Bank
,,,,,,,, for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson
, ,,, ,,,

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17. The ,,, ,,,,, accounting equation can be , , ,, ,, , , , ,, , , , ,, , , , ,, , , , ,,,,, ,,, stated as: , , , , ,, , ,




A. A +L - ,,,,,,,, , ,,,,,,,,




OE =0. ,,,,,,,, ,,,,,,,, ,




B. A - ,,,,,,,,




L +OE =0.
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C. -A +L - ,,,,,,,, , ,,,,,,,,




OE =0. ,,,,,,,, ,,,,,,,, ,




D. A - L - ,,,,,,,, ,,,,,,,, ,,,,,,,,




OE =0. ,,,,,,,, ,,,,,,,, ,




18. Examples of external transactions include all of the following except: ,,,,,,,, ,,,, ,,,, ,,,,,, ,, ,,,,,,,, ,,,,,,,, , ,,,,,,, ,,,,,,,, ,, ,,, ,, , ,,,,,,,,




A. Paying employee ,,,,,, ,,




ssalaries. ,




B. Purchasing , ,, , ,




equipment
,, ,




.
C. Depreciating ,




equipment.
D. Collecting , ,,, ,,, ,




areceivable ,




.

19. Examples of internal transactions include all of the following except: ,,,,,,,, ,,,,,,,, ,,,,,,,, ,, ,, ,,, , ,,,,,,, , ,,,,,,,, ,,,,,,,, ,,,,, ,,, ,,,,,,,,




A. Writing off an uncol , , , , , , , , , , , , , , , , , , , , , , , ,




lectible account. ,




B. Recording the expiration of prep ,,, ,,, ,, ,, , ,, ,, , ,,, ,,,,, ,, ,,, ,, ,




aidi nsurance. ,




C. Recording unpai ,,,,,,,,




dwages. ,




D. Paying wages to co , , , , , , , , , , , , , , , , , , , , , , , ,




mpany employees. ,




20. XYZ Corporation receives $100,000 from investors for issuing them share
,,,,,,,, ,, ,, , ,, , ,,,,,,,, ,,,, ,,,, ,, , ,, , ,, ,,,,,,,, ,, ,, ,, ,, , ,, , ,, ,, ,,,,,,,,




s of its stock.XYZ's journal entry to record this transaction would include a:
,,, ,,,, , ,,, ,,,,, ,,,, ,,,, , ,,,,,,,, ,,,,,,,, ,,,,,,,, ,,,,,,,, ,,,,,,,, ,,,,,,,, ,,,,,,,, ,,, ,,,,, ,,, ,,,,,




A. Debit to inv ,, ,, ,,, , , ,, ,, ,, ,




estments.
B. Credit to retained ,,,,, ,,,,,, ,




earnings.
C. Credit to capital ,,,, ,,,,,, ,




stock.
D. Creditto , ,




revenue.