Aleks practice questions

Question 1

__________- prepaid insurance is classified as neither Revenue, expense or other changes to stockholders equity

Question 2

Deferred revenue is not classified as “revenue”

Answer 2

A liability created when a business receives cash in advance of providing goods or services to its customers. For example, magazine publishers collect cash in advance and record it as a debit (increase) to the Cash account and a credit (increase) to the Deferred Revenue account. The Deferred Revenue account is adjusted at the end of a financial period, and its adjusted balance appears under liabilities in the balance sheet. Example: Spectacular Remodeling Co. requires its customers to make payments in advance (cash deposits) for work to be done later by Spectacular. At the time cash deposits are received, they are recorded by debiting Cash and crediting Unearned Service Revenue.

Question 3

prepaid insurance is not classified as revenue, expense, or other changes to stockholder equity.

Question 4

Accounts payable is not classified as revenue, expense or other changes to stockholder equity

Question 5

Liabilities (e.g., accounts payable, loans):

Answer 5

Debit to decrease the liability.
Credit to increase the liability.

Question 6

Expenses (e.g., rent, salaries):

Answer 6

Debit to increase expenses.
Credit to decrease expenses.

Question 7

Accounts receivable is an __________ account

Answer 7

asset

Question 8

Salaries payable is __________account

Answer 8

liability

Question 9

Salaries Expense should be classified as a _____________because expenses reduce retained earnings, which is part of equity.

Answer 9

Change to Stockholders’ Equity

Question 10

Account that have a normal debit balance are

Answer 10

assets, expenses and dvidends

Question 11

Accounts that have a normal credit balance are

Answer 11

liabilities, revenues and equity