Acct 2301.02 Principles Of Financial Accounting Quiz

2.

Adjusting entries result in a better matching of revenues and expenses.
- True
- False
Correct Answer

A. True

Explanation

Truer words were never spoken. Okay, I guess maybe they were, but this statement is still right on.

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3.

Adjusting entries are made after the preparation of financial statements.
- True
- False
Correct Answer

A. False

Explanation

Adjusting entries are made before preparation of the financial statements.

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4.

Preparation of a trial balance is the first step in the analyzing and recording process.
- True
- False
Correct Answer

A. False

Explanation

Preparing a trial balance comes after the analysis of transactions, journalizing and posting of all entries.

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5.

The business entity principle prescribes that a business will continue operating for an indefinite period of time.
- True
- False
Correct Answer

A. False

Explanation

What is described in this question is actually the going concern principle. The business entity principle basically prescribes that a business' activities and financial information is separate from those individuals that own the business.

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Acct 2301.02 Principles Of Financial Accounting Quiz

Ethics are not important to the primary functions of accounting.

Quiz Preview

Adjusting entries result in a better matching of revenues and expenses.

Adjusting entries are made after the preparation of financial statements.

Preparation of a trial balance is the first step in the analyzing and recording process.

The business entity principle prescribes that a business will continue operating for an indefinite period of time.