ACCOUNTING 2100 EXAM 2 STUDY GUIDE WMU
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question:
1. Accrual-Basis Accounting
Answer:
Record revenues when goods and services are provided to customers and record
expenses for the costs used to provide those goods and services to customers
Question:
2. Cash-Basis Accounting
Answer:
Record revenues at the time cash is received and record expenses at the time
cash is paid
Question:
3. What is the different between accrual-basis accounting
and cash-basis accounting?
Answer:
Timing
Question:
4. Revenue Recognition Principle
Answer:
Record revenues in the period in which we provide goods and services to
customers
Question:
5. Matching Principle
Answer:
Requires expenses to be reported in the same period as the revenues to which
they are related
Question:
6. Purpose and recording of adjusting entries
Answer:
-Used to record changes in assets and liabilities that have occurred during the
period but that we have not yet recorded
-Record assets and liabilities in advance and in the current period
, Question:
7. Four types of adjusting entries
Answer:
1. Prepaid Expenses
2. Deferred Revenue
3. Accrued Expenses
4. Accrued Revenue
Question:
8. Prepaid Expenses
Answer:
Deferral; expenses paid in cash and used at a later period
Question:
9. Deferred Revenue
Answer:
Company received cash in advance from customers but products and services
won't be provided until a later period
Question:
10. When a company has used costs in the current period, but the company has not
yet paid cash for those costs
Answer:
Accrued Expenses
Question:
11. When a company provides products or services but has not yet received cash
Answer:
Accrued Revenue
Question:
12. Adjusted Trial Balance
Answer:
List of all accounts and their balances at a particular date, after we have updated
account balances for adjusting entries
Question:
13. Where should adjusting entries be posted?
Answer:
The general ledger
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question:
1. Accrual-Basis Accounting
Answer:
Record revenues when goods and services are provided to customers and record
expenses for the costs used to provide those goods and services to customers
Question:
2. Cash-Basis Accounting
Answer:
Record revenues at the time cash is received and record expenses at the time
cash is paid
Question:
3. What is the different between accrual-basis accounting
and cash-basis accounting?
Answer:
Timing
Question:
4. Revenue Recognition Principle
Answer:
Record revenues in the period in which we provide goods and services to
customers
Question:
5. Matching Principle
Answer:
Requires expenses to be reported in the same period as the revenues to which
they are related
Question:
6. Purpose and recording of adjusting entries
Answer:
-Used to record changes in assets and liabilities that have occurred during the
period but that we have not yet recorded
-Record assets and liabilities in advance and in the current period
, Question:
7. Four types of adjusting entries
Answer:
1. Prepaid Expenses
2. Deferred Revenue
3. Accrued Expenses
4. Accrued Revenue
Question:
8. Prepaid Expenses
Answer:
Deferral; expenses paid in cash and used at a later period
Question:
9. Deferred Revenue
Answer:
Company received cash in advance from customers but products and services
won't be provided until a later period
Question:
10. When a company has used costs in the current period, but the company has not
yet paid cash for those costs
Answer:
Accrued Expenses
Question:
11. When a company provides products or services but has not yet received cash
Answer:
Accrued Revenue
Question:
12. Adjusted Trial Balance
Answer:
List of all accounts and their balances at a particular date, after we have updated
account balances for adjusting entries
Question:
13. Where should adjusting entries be posted?
Answer:
The general ledger
