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19 Cards in this Set

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The dividends account is increased on the _____ side.
Debit
The financial statement that shows the financial condition of the enterprise at the end of a period:
Balance sheet
_____ and _____ are reported in the stockholders' equity section of the balance sheet.
Common stock, retained earnings
Which of the following statements about a trial balance is incorrect?

a) Its primary purpose is to prove the mathematical equality of debits and credits after posting.
b) It uncovers errors in journalizing and posting.
c) It is useful in the preparation of financial statements.
d) It proves that all transactions have been recorded.
d) It proves that all transactions have been recorded.
Posting is the process of transferring items entered in a general journal to the _____.
General ledger
An adjusting entry would never include a:

a) Debit to an expense account and a credit to an asset account.
b) Debit to an expense account and a credit to a liability account.
c) Debit to a liability account and a credit to a revenue account.
d) Debit to an asset account and a credit to a liability account.
d) Debit to an asset account and a credit to a liability account.
The adjusting entry to record revenue that has been earned, but was previously recorded as unearned results in:
A debit to a liability account and a credit to a revenue account.
In the closing process all of the revenue and expense account balances are
transferred to:
The Income Summary account
What will happen if the adjusting entry for an accrued expense is not made?
Liabilities (and expenses) will be understated.
The post-closing trial balance consists only of:
Real accounts
An informal device for accumulating and sorting information:
Work sheet
Adjusting entries can be classified as either:
Prepayments or accruals
Unearned revenues are classified as:
Liabilities
Transaction between a business and its environment:
External transaction
External/Internal/Not Recorded

A supplier of a company‘s raw material is paid an amount owed on account.
External transaction
Transaction resulting from an event occurring entirely within a business:
Internal transaction
External/Internal/Not Recorded

A customer pays its open account.
External
External/Internal/Not Recorded

A new chief executive officer is hired.
Not Recorded
External/Internal/Not Recorded

The biweekly payroll is paid.
External