MGAB01H3 Study Guide - Midterm Guide: Deferral, Double-Entry Bookkeeping System, Retained Earnings

TRUE or FALSE

1. Accumulated Depreciation is a permanent account.
2. The dividends account is a temporary account.
3. The accumulated depreciation is closed to the income summary account.
4. Office equipment is an example of a current asset account.
5. The amount of the net income for a period appears on both the income statement and the balance sheet for the period.
6. Generally accepted accounting principles require accrual-basis accounting.
7. Unearned revenue is a liability.
8. The financial statement is prepared from the unadjusted trial balance.
9. After analyzing transactions, the next step is to post the transaction in the ledger.
10. Prepaid insurance is an example of a current asset. 

On March 31, the following data were accumulated to assist the accountant in preparing the adjusting entries for Potomac Realty:

a.The supplies account balance on March 31 is $5,620, the supplies on hand on March 31 are $1,290.

b.The unearned rent account balance on March 31 is $5,000 representing the receipt of an advance payment on March 1 of four months’ rent from tenants.

c.Wages accrued but not paid at March 31 are $2,290

d.Fees accrued but unbilled on March 31 are $16,825.

e.Depreciation of office equipment is $4,600.

On May 31, the following data were accumulated to assist theaccountant in preparing the adjusting entries for OceansideRealty:

Chart of Accounts