This class is Intro to Accounting 

Accounting is an information system that identifies, records, and communicates economic events of an organization to interested users.

According to the revenue recognition principle, a company should recognize revenue once it meets its performance obligation.

The basic objective of financial reporting is to provide useful information to investors and creditors to make decisions.

Private companies have a choice of whether to follow ASPE or IFRS.

According to the cost principle, assets should be reported at their replacement cost, not their original cost.

The enhancing qualitative characteristic of verifiability is met when independent observers using the same methods obtain the same results.

Collection of an account receivable will increase both cash and accounts receivable.

An expense paid with cash would result in an equal decrease in liabilities and owner’s equity.

Liabilities represent the ownership’s claim on total assets.

The going concern assumption assumes that a company will liquidate in the near future.

In a proprietorship, owner’s equity increases when

A company has a profit when

Owner’s equity is not                       

A payment of accounts payable would

The financial statement that reports the assets, liabilities, and owner’s equity at a specific date is the?

Transactions are initially recorded in the

The right side of an account is referred to as the

A purchase of office equipment for cash requires a credit to

The equality of the accounting equation can be proven by preparing a

Which of the following accounts would be increased with a debit?

Assets and liabilities are both decreased by credits

The Owner’s Capital account is increased by credits

An account will have a credit balance if the total debit amounts exceed the total credit amounts

The ledger is also known as the book of original entry

The basic steps in the recording process are (1) analyze each transaction, (2) enter the transaction in a journal, and (3) transfer the journal information to the appropriate

ledger accounts

The posting phase of the recording process makes it possible to accumulate the effects of journalized transactions in individual accounts.

Assets = Liabilities + Owner’s Capital – Drawings + Revenues – Expenses is a correct form of the expanded basic accounting equation.

Owner’s equity is increased by owner’s investments and revenues.

When the columns of the trial balance equal each other, it proves no errors occurred in recording and posting.

Debits should be listed before credits in journal entries

Accountants divide the life of a business into specific time periods,  such as monthly, quarterly and yearly

Revenue is recognized in the period in which the cash was received

Payments of expenses that will benefit more than one accounting period are referred to as prepaid expenses.

Cost less accumulated depreciation is a measurement of the current value of an asset such as equipment or a building

Depreciation is the allocation of the cost of a long-lived asset to expense, over its useful life, in a rational and systematic manner

The adjusting entry for unearned revenues results in a debit to an asset account and a credit to a revenue account.

Accumulated depreciation is an example of a contra asset account and its balance is deducted from the related asset in the financial statements.

When the accrual basis of accounting is applied, adjusting entries are not necessary.

Adjustments for accrued expenses are necessary to record the obligations that exist at the balance sheet date and to recognize the expenses that are applicable to the current accounting period.

Revenue is recognized when there is an increase in assets or a decrease in liabilities as the result of a company’s business activities with its customers.

Accrued revenues are also called accrued liabilities

Under IFRS, public companies must prepare quarterly financial  statements, which means they must prepare adjusting entries quarterly

The recording of wages earned but not yet paid is an example of an adjustment that:

A list of the accounts and their balances after all adjustments have been made is known as a(n):

Prior to recording adjusting entries, revenues exceed expenses by $60,000. Adjusting entries for accrued wages of $5,000 and depreciation expense of $5,000 were made. Profit for the year would be:

Generally, revenue is not recorded in the accounting period when

If an adjusting entry to record accrued revenue was not posted,