T/F Prior to an accrual adjustment, the revenue account (and the related asset account) or the expense account (and the related liability account) is understated.
Answer: True
Learn More :
Accounting 2000 Chapter 4
- A company's monthly bank statement shows a collection of a note receivable by the bank in the amount of $500. Which of the following is one part of the journal entry needed to record the note collection by the company?
- For which of the following will an adjusting entry be required as the result of a bank reconciliation?
- Springer Company listed outstanding checks totaling $4,500 on its September bank reconciliation. In October, the company issued checks totaling $45,700. The October bank statement shows that checks totaling $39,800 cleared the bank. In addition, a check from one of Springer's customers in the amount of $500 was returned as NSF. The outstanding checks on the October bank reconciliation should total
- For which item below might a bank issue a credit memorandum to a depositor's account?
- T/F Deposits in transit are added to the cash balance per books on the bank reconciliation.
- Which of the following is classified in an income statement as a nonoperating activity?
- What type of accounts are Sales Returns and Allowances and Sales Discounts?
- In a perpetual inventory system, which accounts will the seller credit when merchandise is returned by a customer?
- On what amount is a sales discount based?
- Which of the following items does not result in an entry to the Inventory account under a perpetual system?
- Which of the following is not a typical example of an accrued expense?
- At December 31, 2017, before any year-end adjustments, Mccarty Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be
- Ignatenko Company purchased office supplies costing $5,000 and debited Supplies for the full amount. Supplies on hand at the end of the accounting period were $1,300. The appropriate adjusting journal entry to be made would be
- Adjustments for prepaid expenses
- Adjustments for unearned revenues
- Cash received before services are preformed are recorded as?
- The difference between an asset's cost and its accumulated depreciation is called
- Which of the following is not a typical example of a prepaid expense?
- T/F Book value is equal to cost minus accumulated depreciation.
- Which one of the following is not a justification for adjusting entries?
- T/F Accrued expenses are expenses that have already been paid.
- In 2017, Costello Company performs work for a customer and bills the customer $10,000; it also pays expenses of $3,000. The customer pays Costello in 2018. If Costello uses the accrual-basis of accounting, then Costello will report
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.