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Unearned revenue is a prepayment that requires an adjusting
entry when services are performed.
· Question 4
When closing entries are prepared, each income statement
account is closed directly to retained earnings.
· Question 5
The accounting cycle begins with the journalizing of the
transactions
· Question 6
Management usually wants ________ financial statements and the
IRS requires all businesses to file _________ tax returns.
· Question 7
A flower shop makes a large sale for $1,000 on November 30. The
customer is sent a statement on December 5 and a check is
received on December 10. The flower shop follows GAAP and
applies the revenue recognition principle. When is the $1,000
considered to be recognized?
· Question 8
Which statement is correct?
· Question 9
Given the data below for a firm in its first year of operation,
determine net income under the cash basis of accounting.
Cash received from customers
$48,000
Accounts receivable
12,000
Cash paid for expenses
26,000
Accounts payable (related to expenses)
3,000
Prepaid rent for next period
7,000
· Question 10
Accrued expenses are:
· Question 11
If a resource has been consumed but a bill has not been received
at the end of the accounting period, then:
· Question 12
Depreciation is the process of:
· Question 13