ACCT 3001 : Accounting 3001 Test One Study Guide
Document Summary
Test 1 (chapters 1, 2, 3, 4, 5, 6) The accounting cycle: journalize, post to the ledger, trial balance, adjusting entries, adjusted trial balance, income statement, retained earnings statement, balance sheet, closing entries, post trial balance. Assets, expenses, & dividends are increased with a debit and decreased with a credit. Revenues, liabilities, retained earnings, & common stock are increased with a credit and decreased with a debit. Other accounts: prepaid expense asset account - deferral- those expenses that are paid for in advance (prepaid rent, insurance) Prepaid insurance: accrued revenue asset account accrual - revenue that has been completed but cash has not been received () Service rev: unearned service revenue liability deferral - paid for a service in advance. Service revenue: accrued expense liability accrual - expense happened but not yet paid for. Accts payable : adjusting entries must be done in order to not understate or overstate any account. Income summary will be closed out to retained earnings.
