Chapter 2 (Recording process) + 3 (Adjusting Accounts)

Question 1

Current assets

Answer 1

• Cash and cash equivalents
• Receivables (account, notes, other)
• Inventory
• prepaid expense

Question 2

Long-term Asset

Answer 2

• Net PPE
• Accumulated Depreciation
  -Net intangibles ( music, patents)
• Accumulated amortizaion

Question 3

Current liabilities

Answer 3

• Payable (account, notes, other)
• Short-term debt
• Unearned revenue

Question 4

Long-term liabilities

Answer 4

long-term debt

Question 5

Recording process

Answer 5

1. Transaction
2. Journal Entry
   3.General Ledger
3. trial balance
   5 Financial statements

Question 6

Accrual-basis acc

Answer 6

when the service is performed recod the transaction

Question 7

Cash-basis acc

Answer 7

record only when they receive cash and expense when they pay out cash

Question 8

Accruals (name)

Answer 8

An expense or a revenue that occurs before the business pays or receive cash

• Account Payable (liability)
• Account Receivable (asset)

Question 9

Deferrals (name)

Answer 9

the business pair or received cash in advance before the expense or revenue is recognized

• Prepaid expense (asset)
• Unearned revenue (liability)

Question 10

Accounts Receivable

Answer 10

Initial Entry: Acc Receivable Dr (A+) & Revenue Cr (A+)
Adjusting Entry: Cash Dr (A+) & Acc Receivable Cr (A-)

Question 11

Account Payable (Accruals)

Answer 11

Initial Entry: Expense Dr (E+) &. Acc Payable Cr (L+)
Adjusting Entry: Acc Payable Dr (L-) & cash Cr (A-)

Question 12

Prepaid Expense (Deferrals)

Answer 12

Initial Entry: Prepaid expense Dr (A+) & cash Cr (A-)
Adjusting entry: Expense Dr (E+) & Prepaid Expense Cr (A-)

Question 13

Unearned Revenue (Deferrals)

Answer 13

Initial Entry: Cash Dr (A+) & Unearned Revenue Cr (L+)
Adjusting Entry: Unearned Revenue Dr (L-) & Revenue Cr (E+)