If an expense is paid in advance, a debit entry is made in the prepaid expense account at the time it is paid.

When prepaid expenses are realized, an adjusting credit entry is made to prepaid expense and a debit entry is made for the relevant expense account.

At the time equipment is purchased, no expense is recorded.

When depreciation expense is recognized, the accumulated depreciation account is credited and the depreciation expense account is debited.

Unearned revenue is a liability account.

When prepaid rent is recognized as revenue by the landlord, the unearned revenue account is debited and the revenue account for rent is credited.

When inventory is sold, a debit entry is made to the cost of goods sold account.

At the time inventory is purchased, no expense is recorded.

Sales revenue and cost of goods sold should be recorded when merchandise inventory is sold, not when it is purchased.

All of the following are considered current assets: cash, accounts receivable, merchandise inventory, supplies, and prepaid expense.

If an expense is paid in advance, a credit entry is made in the prepaid expense account at the time it is paid.

When prepaid expenses are realized, an adjusting debit entry is made to prepaid expense and a credit entry is made for the relevant expense account.

Depreciation expense is recorded at the time a depreciable asset is purchased, for the amount of the purchase.

When depreciation expense is recognized, the accumulated depreciation account is debited and the depreciation expense account is credited.

Unearned revenue is an asset account.

When prepaid rent is recognized as revenue by the landlord, the unearned revenue account is credited and the revenue account for rent is debited.

When inventory is sold, a credit entry is made to the cost of goods sold account.

At the time inventory is purchased, the expense should immediately be recognized and recorded.

Sales revenue and cost of goods sold should be recorded when merchandise inventory is purchased, not when it is sold.

All of the following are considered current assets: cash, accounts receivable, merchandise inventory, supplies, and equipment.

Managerial accounting is aimed at helping internal users make better decisions.

Financial accounting is aimed at helping external users understand the organization's business transactions.

Revenue should be recognized when it is earned.

Cash flow records cash when it is received.

Assets are resources a business owns or controls that are expected to provide current and future benefits to the business.

Liabilities are creditors’ claims on an organization’s assets involving probable future payment of assets, products, or services.

The expanded accounting equation says that assets should equal liabilities plus common stock plus revenue minus expenses and dividends.

If net income is greater than dividends, then owner's equity should increase (all else equal).

If a sale is made but not paid for, revenue for the sale should be recorded.

When cash is paid for sale from a previous period, there will be an increase in cash flow for the current period (all else equal).

Financial accounting is aimed at helping internal users make better decisions.

Managerial accounting is aimed at helping external users understand the organization's business transactions.

Revenue should be recognized when it is paid for.

Cash flow is recorded when it is earned.

Liabilities are resources a business owns or controls that are expected to provide current and future benefits to the business.

Equity refers to creditors’ claims on an organization’s assets involving probable future payment of assets, products, or services.

The expanded accounting equation says that assets should equal liabilities plus common stock plus dividends plus revenue minus expenses.

If net income is greater than dividends, then owner's equity will decrease.

If a sale is made but not paid for, revenue for the sale should not be recorded.

When cash is paid for sale from a previous period, there will be no increase in cash flow for the current period (all else equal).

For journal entries, the debit should be entered on the first line.

Debits are recorded on the left-hand side of a T-account.

If equipment is purchased, the equipment account should be debited.

If equipment is purchased for cash, the cash account should be credited.

If equipment is purchased on credit, a credit entry should be entered for accounts payable.

If a customer pays off the balance of what they owe, accounts receivable should be credited.

If revenue is earned, a credit entry should be made in the appropriate revenue account.

If expenses are incurred, a debit entry should be recorded in the appropriate expense account.

All of the following are asset accounts: cash, accounts receivable, supplies, inventory, and equipment.

Even if a firm has more debt than equity, their debits and credits for each period should equal each other.

For journal entries, the credit should be entered on the first line.

Debits are recorded on the right-hand side of a T-account.

If equipment is purchased, the equipment account should be credited.

If equipment is purchased for cash, the cash account should be debited.

If equipment is purchased on credit, a credit entry should be entered for accounts receivable.

If a customer pays off the balance of what they owe, accounts receivable should be debited.

If revenue is earned, a debit entry should be made in the appropriate revenue account.

If expenses are incurred, a credit entry should be recorded in the appropriate expense account.

All of the following are asset accounts: cash, accounts payable, supplies, inventory, and equipment.

If a firm has more debt than equity, this implies the sum of their credits will be greater than the sum of their debits.