Accrual Acctg

Question 1

Prepaids are assets or liabilities?

Answer 1

Assets

Question 2

Unearned revenue is an asset or liability?

Answer 2

Liability

Question 3

What is the formula to convert NI from cash to NI accrual?

Answer 3

Add: Increases in Assets, Decreases in Liabilities
Subtract: Decreases in Assets, and Increases in Liabilities

Question 4

What is the formula to convert NI accrual to NI from cash?

Answer 4

Add: Decreases in Assets, Increases in Liabilities
Subtract: Increases in Assets, and Decreases in Liabilities

Question 5

Accrual acctg recognizes and reports economic activities for the period in which occurred. TF

Answer 5

True

Question 6

What is the formula to convert cash COGS to accrual COGS?

Answer 6

Accrual COGS = Increase in inventory + Decrease in AP - Decrease in Inventory - Increase in AP - Cash Payments

Question 7

What is the formula to convert accrual COGS to cash COGS?

Answer 7

Cash COGS = Decrease in inventory + Increase in AP - Increase in Inventory - Decrease in AP - Cash Payments

Question 8

What is the formula to convert cash expenses to accrual expenses?

Answer 8

Accrual Expenses = Increase in prepaid expenses + Decrease in accrued expenses - Decrease in prepaid expenses - Increase in accrued expenses - Cash paid

Question 9

What is the formula to convert accrual expenses to cash expenses?

Answer 9

Cash Expenses = Decrease in prepaid expenses + Increase in accrued expenses - Increase in prepaid expenses - Decrease in accrued expenses - Cash paid

Question 10

What is the easiest way to solve cash to accrual and accrual to cash problems?

Answer 10

Summary journal entries.

Question 11

What is the general procedure to convert cash to accrual and vice versa?

Answer 11

The effects of accruals and deferrals must be taken out