Chapter 3

Question 1

Asset accounts have which balance

Answer 1

Debit

Question 2

Liabilities and shareholders equity accounts have what balance

Answer 2

Credit

Question 3

Revenue accounts have what balance

Answer 3

Credit

Question 4

Expense accounts have what balance

Answer 4

Debit

Question 5

Dividends declared has what balance

Answer 5

Debit

Question 6

Retained earnings has what balance

Answer 6

Credit

Question 7

Accumulated depreciation is a contra what account?

Answer 7

Asset

Question 8

Contra-asset accounts have what balance

Answer 8

Credit

Question 9

Carrying amount

Answer 9

Cost of PPE minutes accumulated depreciation

Question 10

Trial balance

Answer 10

Listing of all account balances in the general ledger at a a specific point

Question 11

Two types of adjusting entries

Answer 11

Accruals

Deferrals

Question 12

Accrual closing entries

Answer 12

Required when a company needs to recognize a revenue/expense before the receipt of payment of cash

Question 13

Deferral closing entries

Answer 13

Required when a company needs to recognize a revenue/expense in an accounting period after the cash has been received or paid

Question 14

4 closing entries

Answer 14

Close revenue accounts to income summary
Close expense accounts to income summary
Close income summary to retained earnings
Close dividends declared to retained earnings

Question 15

Income summary account

Answer 15

Temporarily opened to determine net income then be closed to retained earnings