Chapter 2 Flashcards Preview

Intermediate Accounting > Chapter 2 > Flashcards

Flashcards in Chapter 2 Deck (19)
Loading flashcards...
0
Q

Nominal accounts

A

Accounts that are closed- income statement accounts- rev/exp- closed to oe/re

1
Q

Account

A

Summarizes the effects of transactions on each element of the expanded accounting equation

2
Q

Transactions

A

The transfer or exchange if goods or services

3
Q

Are dividends reported on the income statement?

A

No, even though they are an expense. They reduce retained earnings.

4
Q

General ledger

A

Includes all accounts that appear on the financial statements

5
Q

Subsidiary ledgers

A

Additional detail of general ledger accounts

6
Q

Trial balance

A

Lusts all accounts and their balanced

Only for internal users.

7
Q

Adjusting entries

A

At the end of the period there may be adjusting entries needed to correct:

Un recorded assets
Unrecorded liabilities

Prepaid expenses
Unearned revenues

8
Q

When should revenues be recorded?

A

When earned regardless of when cash is received

9
Q

Unrecorded receivable

A

Earned revenues that is receivable in the future and should be recorded as assets

10
Q

Journal entry for accrued interest on notes receivable

A

Debit- interest receivable

Credit- interest revenue

11
Q

Unrecorded liabilities

A

Expenses being incurred prior to being paid or recorded. Should be recorded when incurred no matter when they are paid.

12
Q

Record accrued salaries and wages

A

Salaries and wages exp-debit

Salaries and wages payable-credit

13
Q

Record accrued interest on ponds

A

Interest exp-debit

Interest payable-credit

14
Q

Record income taxes

A

Income tax expense-debit

Income tax payable-credit

15
Q

Prepaid expenses

A

Payments companies make in advance (needs an adjusting entry to record what was actually incurred for the period and what is left for the future)

16
Q

Unearned revenues

A

Amounts received before the actual earning if revenues -they are a liability

17
Q

Adjusted entries for unearned revenues

A

Depends of unearned revenue was recorded as a credit to a liability account or revenue account:

Liability: unearned blah rev-debit
Blah revenue -credit

Revenue: blah revenue-debit
Unearned blah rev-credit

18
Q

Record depreciation

A

Depreciation exp-debit

Accumulated depr-credit