Accounting 202 final ekici (COMPLETE ANSWERS) 2024

expanded accounting equations - Correct Answer assets= liabilities + se Stockholder equity= cs + re Re= revenues - expensnes - dividends Summary of account normal balances - Correct Answer Assets are increased with a debit. • Liabilities and equities are increased with a credit. • Revenues (a part of equity) are increased with a credit. • Expenses (which decrease equity) are increased with a debit. • Dividends (which decrease equity) are increased with a debit. What is a trial balance? - Correct Answer A list of accounts and their balances at a given time Why is a trial balance prepared? - Correct Answer To prove that debits equal credits and to uncover errors in journalizing and posting How is the order of accounts determined in a trial balance? - Correct Answer Accounts are listed in the order in which they appear in the ledger What is the significance of a trial balance in financial reporting? - Correct Answer It is useful in the preparation of financial statements The order of presentation in the trial balance is - Correct Answer Assets Liabilities Stockholders' equity Revenues Expenses LIMITATIONS OF A TRIAL BALANCE The trial balance may balance even when.. - Correct Answer 1. a transaction is not journalized, 2. a correct journal entry is not posted, 3. a journal entry is posted twice, 4. incorrect accounts are used injournalizing or posting, or 5. offsetting errors are made inrecording the amount of a transaction. Stockholders equity relationships between statements and balance sheets - Correct Answer Starts in balance sheet with common stock and retained earnings then takes the retained earnings to the retained earning statment but needs the net income or loss from income statement first order- balance sheet, income statement, retained earnings revenue recognition principle - Correct Answer The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied. expense recognition principle - Correct Answer The principle that matches expenses with revenues in the period when the company makes efforts to generate those revenues. Let the expenses follow the revenues accrual basis accounting - Correct Answer Transactions recorded in the periods in which the events occur. net income under accrual basis accounting - Correct Answer Net income = Revenue earned - Expenses incurred net income under cash basis accounting - Correct Answer Net income = Cash revenue - Cash expenses cash basis accounting - Correct Answer Reporting income when the cash is received and expenses when the cash is paid. Expenses are recorded when incurred adjusting entries - Correct Answer The journal entries that bring the accounts up to