Test Bank for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson

Test Bank for Intermediate Accounting 7th Edition Spiceland, Sepe, Nelson True / False Questions 1. Owners' equity can be expressed as assets 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. True False 4. After an unadjusted trial balance is prepared, the next step in the accounting processing cycle is the preparation of financial statements. True False 5. Adjusting journal entries are required to comply with the realization and matching principles. True False 6. Accruals occur when the cash flow precedes either revenue or expense recognition. True False 7. The adjusted trial balance contains only permanent accounts. True False 8. The income statement summarizes the operating activity of a firm at a particular point in time. True False Full file at 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 change during a reporting period. 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. True False 13. The closing process brings all temporary accounts to a zero balance and updates the balance in the retained earnings account. True False 14. A reversing entry at the beginning of a period for salaries would include a debit to salaries expense. True False 15. The sale of merchandise on account would be recorded in a sales journal. True False 16. The payment of cash to a supplier would be recorded in a purchases journal. True False Multiple Choice Questions Full file at