The table below represents Able Company’s supplies account. Please supply the missing amount.
Beginning supplies: 2,000
Supplies purchased: ?
Supplies expense: 8,000
Ending supplies: 3,000
In the case of a prepaid expense, the adjusting entry required at the end of a period consists of a credit to Prepaid expense.
Prepaid rent is an expense account.
What is the effect of the adjusting entry for Depreciation expense?
The entry increases total liabilities and increases total expenses.
The entry increases total assets and increases total expenses.
The entry decreases total assets and increases total expenses.
The entry decreases total liabilities and increases total expenses.
To what account is the balance in the Income summary account closed?
The Withdrawal account
The net income account
The Capital account
The Revenue account
Which of the following is TRUE?
Accrual accounting is required by generally accepted accounting principles.
Accrual accounting records expenses when incurred. Cash-basis accounting records expenses when cash is paid.
Accrual accounting records revenue when services are rendered. Cash-basis accounting records revenue when cash is received.
All of the above are true.