INTERMEDIATE ACCOUNTING EXAM
QUESTIONS AND ANSWERS
Collects and processes transaction data and then disseminates the financial information
to interested parties. - Answer-Accounting Information System
Expenses incurred but not yet paid in cash or recorded. - Answer-Accrued Expenses
The trial balance taken immediately after all adjustments have been posted. - Answer-
Adjusted Trial Balance
Entry made at the end of an accounting period to bring all accounts up to date on an
accrual basis, so that the company can prepare correct financial statements. - Answer-
Adjusting Entry
Shows the financial condition of the enterprise at the end of the period. - Answer-
Balance Sheet
The difference between any depreciable asset's cost and its related accumulated
depreciation. - Answer-Book Value
The formal process by which the enterprise reduces all nominal accounts to zero and
determines and transfers the net income or net loss to an owner's equity account. -
Answer-Closing Entries
Reduces the balance of nominal (temporary) accounts to zero in order to prepare the
accounts for the next period's transactions. - Answer-Closing Process
Offsets an asset account on the balance sheet. - Answer-Contra Asset Account
The process of allocating the cost of an asset to expense over its useful life in a rational
and systematic manner. - Answer-Depreciation
Records the dual (two-sided) effect of each transaction in appropriate accounts. -
Answer-Double-Entry Accounting
A happening of consequence and the source or cause of changes in assets, liabilities,
and equity. May be external or internal. - Answer-Event
Reflect the collection, tabulation, and final summarization of the accounting data. -
Answer-Financial Statements
Chronologically lists transactions and other events, expressed in terms of debits and
credits to accounts. - Answer-General Journal
, A collection of all the asset, liability, owner's equity, revenue, and expense accounts. -
Answer-General Ledger
Measures the results of operations during the period. - Answer-Income Statement
The "book of original entry" where the company initially records transactions and
selected other events. Various amounts are transferred from the book of original entry
to the ledger. - Answer-Journal
Entering transaction data into the journal. - Answer-Journalizing
The book (or computer printouts) containing the accounts. - Answer-Ledger
Temporary accounts (revenue, expense, and dividend) that appear on the income
statement, except dividends. - Answer-Nominal Accounts
A trial balance taken immediately after closing entries have been posted. - Answer-
Post-Closing Trial Balance
The process of transferring the essential facts and figures from the book of original entry
to the ledger accounts. - Answer-Posting
Expenses paid in cash before they are used or consumed. - Answer-Prepaid Expenses
Permanent accounts (asset, liability, and equity) that appear on the balance sheet. -
Answer-Real Accounts
The exact opposite of the adjusting entry made in the previous period. - Answer-
Reversing Entries
Summarize transactions possessing a common characteristic (cash receipts, sales,
purchases, cash payments). - Answer-Special Journals
Reports the cash provided and used by operating, investing, and financing activities
during the period. - Answer-Statement of Cash Flows
Reconciles the balance of the retained earnings account from the beginning to the end
of the period. - Answer-Statement of Retained Earnings
Contains the details related to a given general ledger account. - Answer-Subsidiary
Ledger
An external event involving a transfer or exchange between two or more entities. -
Answer-Transaction
QUESTIONS AND ANSWERS
Collects and processes transaction data and then disseminates the financial information
to interested parties. - Answer-Accounting Information System
Expenses incurred but not yet paid in cash or recorded. - Answer-Accrued Expenses
The trial balance taken immediately after all adjustments have been posted. - Answer-
Adjusted Trial Balance
Entry made at the end of an accounting period to bring all accounts up to date on an
accrual basis, so that the company can prepare correct financial statements. - Answer-
Adjusting Entry
Shows the financial condition of the enterprise at the end of the period. - Answer-
Balance Sheet
The difference between any depreciable asset's cost and its related accumulated
depreciation. - Answer-Book Value
The formal process by which the enterprise reduces all nominal accounts to zero and
determines and transfers the net income or net loss to an owner's equity account. -
Answer-Closing Entries
Reduces the balance of nominal (temporary) accounts to zero in order to prepare the
accounts for the next period's transactions. - Answer-Closing Process
Offsets an asset account on the balance sheet. - Answer-Contra Asset Account
The process of allocating the cost of an asset to expense over its useful life in a rational
and systematic manner. - Answer-Depreciation
Records the dual (two-sided) effect of each transaction in appropriate accounts. -
Answer-Double-Entry Accounting
A happening of consequence and the source or cause of changes in assets, liabilities,
and equity. May be external or internal. - Answer-Event
Reflect the collection, tabulation, and final summarization of the accounting data. -
Answer-Financial Statements
Chronologically lists transactions and other events, expressed in terms of debits and
credits to accounts. - Answer-General Journal
, A collection of all the asset, liability, owner's equity, revenue, and expense accounts. -
Answer-General Ledger
Measures the results of operations during the period. - Answer-Income Statement
The "book of original entry" where the company initially records transactions and
selected other events. Various amounts are transferred from the book of original entry
to the ledger. - Answer-Journal
Entering transaction data into the journal. - Answer-Journalizing
The book (or computer printouts) containing the accounts. - Answer-Ledger
Temporary accounts (revenue, expense, and dividend) that appear on the income
statement, except dividends. - Answer-Nominal Accounts
A trial balance taken immediately after closing entries have been posted. - Answer-
Post-Closing Trial Balance
The process of transferring the essential facts and figures from the book of original entry
to the ledger accounts. - Answer-Posting
Expenses paid in cash before they are used or consumed. - Answer-Prepaid Expenses
Permanent accounts (asset, liability, and equity) that appear on the balance sheet. -
Answer-Real Accounts
The exact opposite of the adjusting entry made in the previous period. - Answer-
Reversing Entries
Summarize transactions possessing a common characteristic (cash receipts, sales,
purchases, cash payments). - Answer-Special Journals
Reports the cash provided and used by operating, investing, and financing activities
during the period. - Answer-Statement of Cash Flows
Reconciles the balance of the retained earnings account from the beginning to the end
of the period. - Answer-Statement of Retained Earnings
Contains the details related to a given general ledger account. - Answer-Subsidiary
Ledger
An external event involving a transfer or exchange between two or more entities. -
Answer-Transaction
