Acc 556 Week 2 Homework Chapter 3 and 4 Essay

1334 Words Jan 9th, 2016 6 Pages
ACC 556 WEEK 2 HOMEWORK CHAPTER 3 AND 4
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ACC 556 WEEK 2 HOMEWORK CHAPTER 3 AND 4
CHAPTER 3
1. Economic events that require recording in the financial statements are called accounting transactions.
2. An account is often referred to as a T-account because of the way it is constructed.
3. Revenues are a subdivision of stockholders’ equity.
4. Salaries and wages payable is a type of expense.
5. Operating activities are the types of activities the company performs to generate profits.
6. If total liabilities decreased by $4,000, then
7. An expense
8. Are advanced receipts from
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4. When closing entries are prepared, each income statement account is closed directly to retained earnings.
5. The accounting cycle begins with the journalizing of the transactions.
6. Management usually wants ________ financial statements and the IRS requires all businesses to file _________ tax returns.
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?
8. Which statement is correct?
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
10. Accrued expenses are:
11. If a resource has been consumed but a bill has not been received at the end of the accounting period, then:
12. Depreciation is the process of:
13. If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month’s financial statements?
14. Why do generally

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