Question 1

The balance in the Office Supplies account on May 1 was $1,500,supplies purchased during May totaled $6,000,and the amount of supplies on hand at May 31 was $3,600.
a)What amount of Supplies Expense will be shown on the income statement for May?
b)What amount of supplies will be shown on the balance sheet at the end of May?

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Question 2

What effect does providing services on account have on the statement of cash flows? The balance sheet?

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Question 3

Describe the difference between temporary and permanent accounts and indicate which accounts are closed.

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Question 4

When cash is paid in advance for an insurance policy that covers the next year,how is the accounting equation affected by the cash payment for the insurance?

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Question 5

What effect does the recording of revenue normally have on total assets?

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Question 6

What is the purpose of the closing process?

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Question 7

What is the effect on the accounting equation of a cash payment for an operating expense?

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Question 8

What type of account is Salaries Payable?

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Question 9

What effect does the collection of accounts receivable have on total assets?

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Question 10

Each year,a company's net income is carried forward from the income statement to what other financial statement?

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Question 11

Give an example of a transaction that decreases a liability and increases equity.

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Question 12

What is the purpose of the statement of cash flows?

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Question 13

What is the effect on the accounting equation of a cash payment to creditors?

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Question 14

Give an example of a transaction that increases a liability and decreases equity.

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Question 15

What is "Retained Earnings?"

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Question 16

What type of account is Prepaid Rent?

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Question 17

What effect does the payment to a creditor have on total assets?

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Question 18

When is revenue recognized under accrual accounting?

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Question 19

Joe's Messenger Service provided $200 of services to customers on account.How does this transaction affect the statement of cash flows? The income statement?

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Question 20

What is a deferral?

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Quiz 2: Understanding the Accounting Cycle