Exam 3: The Accounting Information System

When an item of revenue is collected and recorded in advance, it is normally called a(n) ___________ revenue.

A journal entry to record a payment on account will include a

The trial balance

An accrued expense can best be described as an amount

An optional step in the accounting cycle is the preparation of

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

On the income statement, revenues are increased by a debit whereas on the statement of financial position retained earnings is increased by a credit.

Posting

A document prepared to prove the equality of debits and credits after all adjustments have been prepared is the adjusted statement of financial position.

Debra, Inc. is preparing its annual financial statements based on its adjusted trial balance and will prepare its statement of financial position first followed by its income statement.

The accrual basis recognizes revenue when earned and expenses in the period when cash is paid.

Which of the following must be considered in estimating depreciation on an asset for an accounting period?

An adjusting entry should never include

Accounts maintained within the ledger that appear on the statement of financial position include all of the following except

Which of the following accounts is reported in the equity section of the statement of financial postion?

The post-closing trial balance consists of asset, liability, equity, revenue and expense accounts.

A company must make adjusting entries each time it prepares an income statement and a statement of financial position.

Which of the following errors will cause an imbalance in the trial balance?

The trial balance will not balance when a company debits two statement of financial position accounts and no income statement accounts.

An adjustment for salaries and wages expense, incurred but unpaid at year end, is an example of an accrued expense.