Generally Accepted Accounting Principles (GAAP) allow companies to issue financial statements, using either the cash basis or the accrual basis of accounting, depending on their needs.
Adjusting entries are done to make sure that expenses and revenues are recorded in the proper accounting period.
A single journal entry must debit only one account and credit only one account for the same amount so that the entry is in balance.
The current ratio is cash divided by current liabilities.
Materiality is subjective. One company may consider $1,000 material and another company may not.
Revenues are recorded when _______________.
Which of the following is NOT a liability?
Management failing to reveal a default on a loan agreement will have violated what principle?
Expenses are recorded in the same period that related revenue is recorded, according to the _______________.
The percentage-of-completion method recognizes revenue _______________.
An asset cost $14,400 and is expected to last 8 years, at which time it will be sold for a scrap value of $2,400. Using straight-line depreciation, the monthly depreciation journal entry would be _______________.
When money is collected from a customer previously billed, we _______________.
Which event will have the effect of increasing retained earnings?
The income summary account is used to _______________.
The dividends payable account belongs on which statement?
Paid $20,000 for stock in a newly formed corporation.
Purchased photocopier for $5000 on account.
Bought office supplies for immediate consumption for $200 cash.
Billed customer $3500 for services performed
Customer paid $2,000 on account.
Prepaid insurance account has a $2,400 balance for a twelve-month premium. Month one has ended.
Office supplies on hand account has a balance of $1,955, and a physical count reveals that there are $715 worth of supplies remaining at month end.
A customer had previously paid $500 in advance on an order. The order has now been shipped FOB destination.
Sales tax of $100 is collected from a customer to be remitted to the state at a later date.
At month end, $2,300 of wages are due to employees but not yet paid.