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    Accounting Basics:: Choose The Right Alternative

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    Olfa FATNASSI
    The balance sheet reports a company's assets and the income statement reports revenues and expenses. The balance sheet indicates assets and liabilities at a point in time, while the income statement covers a period of time. Under the accrual method, interest expense is reported when incurred rather than when paid. Assets reported on the balance sheet include prepaid insurance and land, but not a company's management team or logo. The income statement reports depreciation expense for the accounting period.

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    Accounting Basics:: Choose The Right Alternative

    Uploaded by

    Olfa FATNASSI
    31 views6 pages
    The balance sheet reports a company's assets and the income statement reports revenues and expenses. The balance sheet indicates assets and liabilities at a point in time, while the income statement covers a period of time. Under the accrual method, interest expense is reported when incurred rather than when paid. Assets reported on the balance sheet include prepaid insurance and land, but not a company's management team or logo. The income statement reports depreciation expense for the accounting period.

    Original Title

    MPIF REVISION

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    The balance sheet reports a company's assets and the income statement reports revenues and expenses. The balance sheet indicates assets and liabilities at a point in time, while the income statement covers a period of time. Under the accrual method, interest expense is reported when incurred rather than when paid. Assets reported on the balance sheet include prepaid insurance and land, but not a company's management team or logo. The income statement reports depreciation expense for the accounting period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    31 views6 pages

    Accounting Basics:: Choose The Right Alternative

    Uploaded by

    Olfa FATNASSI
    The balance sheet reports a company's assets and the income statement reports revenues and expenses. The balance sheet indicates assets and liabilities at a point in time, while the income statement covers a period of time. Under the accrual method, interest expense is reported when incurred rather than when paid. Assets reported on the balance sheet include prepaid insurance and land, but not a company's management team or logo. The income statement reports depreciation expense for the accounting period.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    Accounting Basics 

    :
    Choose the right alternative.

    1. The financial statement that reports the amount of a company’s assets is the……

    balance sheet income statement statement of cash flows

    2. The financial statement that reports the company’s revenues and expenses is the…….

    balance sheet income statement statement of cash flows

    3. The heading of the balance sheet will indicate which of the following?

    a period of time a moment in time

    4. Under the accrual method of accounting, the interest expense that is reported on the income statement is
    the amount of interest that was…..

    incurred paid

    5. A company’s superior management team and the company’s logo will be reported as assets on its balance
    sheet.

    True False

    6. The financial statement that reports information in a format that is similar to the accounting equation is the…

    balance sheet income statement statement of cash flows

    7. The financial statement that reports the amount of depreciation expense applicable to the current
    accounting period is the…..

    balance sheet income statement

    8. Depreciation of the equipment used in a business is recorded in order to…..

    9. report the equipment’s current market value on the balance sheet


    allocate the equipment’s cost to expense during the periods in which it is used

    10. Which of the following assets will not be depreciated?

    buildings equipment land vehicles

    11. The amount of prepaid insurance that has not expired as of the end of an accounting period should be
    reported as…..

    an asset an expense a liability

    12. Under which method of accounting are revenues reported on the income statement in the period in which
    they are earned?

    accrual basis or method cash basis or method


    13.Under the accounting or bookkeeping system known as double entry, the number of general ledger accounts
    that will be involved in each transaction is…..

    one two two or more

    14. The word which indicates the left side of a general ledger account is…….

    Debit credit

    15. A sale is made with credit terms that allow the customer to pay in 30 days. Under the accrual method of
    accounting the account to be debited at the time of the sale is……..

    Accounts Receivable Cash Sales

    16. When the company receives the money from its customer that was billed in the prior month, the
    company should credit………

    Accounts Receivable Cash Sales

    17The account Rent Expense is almost always……

    debited credited

    18When a company writes a check to pay its rent, the account Cash will be…….

    Debited credited

    19.The account Prepaid Insurance is expected to have this type of balance.

    Debit credit

    20. When a company receives goods or services on credit, it will record the amount owed in Accounts
    Payable as a…….

    debit credit

    21. Expenses will cause a company’s total amount of owner’s equity or stockholders’ equity to ……

    Increase decrease
    22. At the time that a company buys an asset for cash, the total amount of its owner’s equity or
    stockholders’ equity will…….

    increase decrease not change


    23. When a company uses the accrual method and bills a client for the services it had just provided, the
    effect on its basic accounting equation will be…….

    an increase in Assets only

    an increase in Assets and an increase in Stockholders’ Equity

    an increase is Stockholders’ Equity and a decrease in Liabilities

    24. The account Wages Payable will be included in which side of the accounting equation?

    left right

    25. The account Unearned Revenues is which type of account?

    asset liability stockholders’ equity expense

    26. The accounts that are closed at the end of the accounting year are the……….

    balance sheet accounts income statement accounts neither

    27. The listing which includes the titles of the general ledger accounts available for recording transactions,
    but excludes the account balances, is the ……….

    chart of accounts trial balance

    28. In accounting, the word expenses has the same meaning as the word payments.

    True False

    29. Under the accrual method of accounting, which of the following are revenues?

    Receiving $100,000 cash from issuing common stock

    Receiving $100,000 cash from a bank loan Providing $100,000 of services on credit (with the cash to
    be received later)

    30. The amount reported as stockholders’ equity should be adjusted at the end of the year so that it is equal
    to the corporation’s market value.
    True False

    31. Common stock and retained earnings are part of a corporation’s…………

    income statement liabilities stockholders’ equity

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