Ch. 2

Question 0

Reversing entries

Answer 0

All accruals can be reversed.
All deferrals with original transaction from cash to expense or revenue can be reversed.
Depreciation and bad debt expense ARE NOT reversed.

Question 1

Adjusting entries

Answer 1

Affect one balance sheet item and one income statement item, never affects cash, adjust books for passage of time

Question 2

Do dividends paid go into income summary or RE?

Answer 2

RE