Financial Accounting Concepts

True (A)

¥200

<p>¥5,200</p> Signup and view all the answers

<p>Prepaid Insurance = Insurance Expense Supplies = Supplies Expense Accumulated Depreciation—Equipment = Depreciation Expense Unearned Service Revenue = Service Revenue</p> Signup and view all the answers

<p>¥4,600 (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Supplies</p> Signup and view all the answers

<p>₺50 (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>To offset the value of a related asset account.</p> Signup and view all the answers

<p>₺40</p> Signup and view all the answers

<p>Prepaid Expenses = Payments made for goods or services to be received in the future Accrued Expenses = Expenses that are recognized before cash is paid out Depreciation = The systematic allocation of the cost of an asset over its useful life Accumulated Depreciation = The total depreciation expense that has been allocated to an asset since it was acquired</p> Signup and view all the answers

<p>Contra asset account (D)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>The difference between the cost of the asset and its accumulated depreciation.</p> Signup and view all the answers

<p>$375 (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Debit to liability account and credit to revenue account</p> Signup and view all the answers

<p>residual value</p> Signup and view all the answers

<p>Accrued expenses = Liabilities that represent expenses that have been incurred but not yet paid Prepaid expenses = Expenses paid in advance before they are incurred Accrued revenues = Income that has been earned but not yet received Unearned revenues = Cash received for services not yet performed</p> Signup and view all the answers

<p>Both revenue and expense accounts (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>48 months</p> Signup and view all the answers

The cost of supplies used during a period, recorded as an expense.

Payment for insurance coverage that applies to future periods, recorded as an asset.

The portion of prepaid insurance that has expired during a period, now an expense.

Distributing the cost of a long-term asset over its useful life as an expense

The total depreciation expense accumulated for an asset over its lifespan.

An account that reduces the value of an asset on the balance sheet.

The difference between the cost of an asset and its accumulated depreciation.

Payment for an expense made in advance, reflected as an asset until it's used.

The cost of using an asset over its useful life, allocated as an expense in each accounting period.

The method used to calculate depreciation, where the expense is allocated evenly over the asset's useful life.

The estimated amount an asset can be sold for at the end of its useful life.

A liability representing cash received for services or goods not yet delivered.

An entry made to record revenue earned during the period and reduce the unearned revenue liability.

The liability decreases as the revenue is recorded, reflecting the services or goods being delivered.

Money received for services that haven't been delivered yet. It's a liability because the business owes those services.

Entries made at the end of an accounting period to update accounts and ensure they accurately reflect current balances.

A portion of the Supplies asset account is transferred to Supplies Expense to reflect the reduction in supplies on hand and the cost of goods used.

Half of the services paid for in advance have been delivered, meaning half of the unearned revenue is now earned and should be recognized as revenue.

They ensure accounting records are accurate, provide a true picture of the business's financial performance, and comply with accounting principles.

A payment made for insurance coverage that will apply to future periods. It's an asset because the company will receive the benefits of the insurance in the future.