©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Financial Accounting Exam #1 Questions
With Correct Answers
Reporting revenues only when cash is received and expenses only when cash is paid is called the
________ basis of accounting - answer✔CASH
Adjusting entries are needed... - answer✔before financial statement preparation and to update
accounts to their prior balances.
Prepaid rent appears in the ______. - answer✔balance sheet because it is an asset
Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used
up during the period. - answer✔decreased; increased
Depreciation is - answer✔is an allocation of the cost of buildings, vehicles, and equipment to
expense over time as they are used.
Adjusting entries are made at the ______ of the accounting period, while daily transactions are
made throughout the accounting period. - answer✔End/Closing
prepaid insurance is an - answer✔asset in the balance sheet
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
When should supplies be recorded as an expense? - answer✔In the period the supplies are used,
regardless of when they were purchased
Adjusting entries for accrued expenses ensure that liabilities are reported for all amounts ______
at the end of the accounting period. - answer✔OWED
Adjusting entries help to ensure that all ______ are recorded in the period in which they are
incurred. - answer✔expenses
If an adjusting entry's debit is to an expense account, then the credit must be to... - answer✔pre
paid expense and liability
An adjusting entry is necessary to record interest expense at year-end because the interest -
answer✔has already been incurred
How do adjusting entries for accrued expenses affect liabilities and expenses? -
answer✔Adjusting entries for accrued expenses can increase liabilities and increase expenses.
A primary purpose of adjusting entries is to record events that - answer✔have occurred but that
have not yet been recorded.
Costs of assets acquired in one period that will be recorded as expense in a future period are
referred to as ______ and are initially recorded as _____. - answer✔prepaid expenses; assets
12/3/2024 11:27AM
Financial Accounting Exam #1 Questions
With Correct Answers
Reporting revenues only when cash is received and expenses only when cash is paid is called the
________ basis of accounting - answer✔CASH
Adjusting entries are needed... - answer✔before financial statement preparation and to update
accounts to their prior balances.
Prepaid rent appears in the ______. - answer✔balance sheet because it is an asset
Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used
up during the period. - answer✔decreased; increased
Depreciation is - answer✔is an allocation of the cost of buildings, vehicles, and equipment to
expense over time as they are used.
Adjusting entries are made at the ______ of the accounting period, while daily transactions are
made throughout the accounting period. - answer✔End/Closing
prepaid insurance is an - answer✔asset in the balance sheet
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
When should supplies be recorded as an expense? - answer✔In the period the supplies are used,
regardless of when they were purchased
Adjusting entries for accrued expenses ensure that liabilities are reported for all amounts ______
at the end of the accounting period. - answer✔OWED
Adjusting entries help to ensure that all ______ are recorded in the period in which they are
incurred. - answer✔expenses
If an adjusting entry's debit is to an expense account, then the credit must be to... - answer✔pre
paid expense and liability
An adjusting entry is necessary to record interest expense at year-end because the interest -
answer✔has already been incurred
How do adjusting entries for accrued expenses affect liabilities and expenses? -
answer✔Adjusting entries for accrued expenses can increase liabilities and increase expenses.
A primary purpose of adjusting entries is to record events that - answer✔have occurred but that
have not yet been recorded.
Costs of assets acquired in one period that will be recorded as expense in a future period are
referred to as ______ and are initially recorded as _____. - answer✔prepaid expenses; assets
