The sum of all debit balances must equal the sum of all credit balances, even in a trial balance.

True

False

Correct!

Review the section "Trial Balances."

In the trial balance, debit balances are listed before credit balances.

True

False

Correct!

Review the section "Trial Balances."

Adjusting entries record transactions accidentally omitted during the period.

True

False

Correct!

Review the section "Adjusting and Reversing Entries."

With a deferred expense, cash is paid prior to incurring the expense.

True

False

Correct!

Review the section "Deferred Expenses."

Accrued revenue is revenue for which the company has been paid but which has not yet been earned.

True

False

Correct!

Review the section "Accrued Revenue."

Fixed Asset Book Value = Cost – Accumulated Depreciation

True

False

Correct!

Review the section "Depreciation."

A short-term asset is expected to be held for fewer than 24 months.

True

False

Correct!

Review the section "Depreciation."

Depreciation is a precise measurement of the loss in value experienced by an asset over time.

True

False

Correct!

Review the section "Depreciation."

Under the straight-line depreciation method, depreciation expense is the same for every full year of the asset’s useful life.

True

False

Correct!

Review the section "Straight-Line Depreciation."

The salvage value of an asset is disregarded with the double-declining balance method when determining depreciation expense.

True

False

Correct!

Review the section "Double-Declining Balance Depreciation."

What shows after withdrawals on a trial balance?

Revenue

Liabilities

Assets

Capital

Correct!

Review the section "Trial Balances."

Which of these is NOT an adjusting entry?

Accrued expenses

Depreciation

Withdrawals

Deferred revenue

Correct!

Review the section "Adjusting and Reversing Entries."

When are adjusting entries completed?

After preparing the adjusted trial balance

Before posting journal entries

After generating financial statements

After preparing the unadjusted trial balance

Correct!

Review the section "Trial Balances."

What type of account is Accumulated Depreciation?

Expense

Contra-revenue

Contra-asset

Liability

Correct!

Review the section "Recording the Depreciation Adjusting Entry."

What is the impact of an adjusting entry for deferred expenses?

A reduction in total expenses

An increase in net income

A reduction in the owner’s capital account balance

An increase in total assets

Correct!

Review the section "Deferred Expenses."

What is the impact of an adjusting entry for accrued revenue?

A reduction in total revenue

A reduction in net income

A reduction in the owner’s capital account balance

An increase in total assets

Correct!

Review the section "Accrued Revenue."

Which statement regarding reversing entries is inaccurate?

They are required.

They are typically recorded for accrued revenue and accrued expenses.

They’re recorded on the first day of the period after the recording of the associated adjusting entry.

They negate the effect of adjusting entries.

Correct!

Review the section "Reversing Entries."

Within which category of adjusting entries does depreciation expense belong?

Deferred expenses

Deferred revenue

Accrued expenses

Accrued revenue

Correct!

Review the section "Deferred Expenses."

The adjusting entry for wages expense falls within the accrued expenses category.

Review the section "Accrued Expenses."

Correct!

Jacobson Company records an adjusting entry that debits Wages Expense and credits Wages Payable. What is a component of the reversing entry?

Debit to Cash

Debit to Wages Payable

Debit to Wages Expense

Debit to Accounts Receivable

Correct!

Review the section "Reversing Entries."