Accountıng I

Yanıt Açıklaması: Value and usefulness of plant assets will decline when the business uses them in its operations. The decline in usefulness of a plant asset is an expense which is called as a depreciation expense. The correct answer is c.

Yanıt Açıklaması: A sole proprietorship is a business owned and run by one person. They are often small type businesses. Usually a small amount of capital is needed and the owner is entitled to all profits. The correct answer is E.

Yanıt Açıklaması: Advertisement Expense, Supply Expense, Depreciation Expense and Salaries-Wages Expense are credited with the same amount of their debit balances, and Income Summary account is debited. The total in this case is: 7,538,25.

Yanıt Açıklaması: Deferred expenses (prepaid expenses) are advance payments of future expenses. The correct answer is E.

Yanıt Açıklaması: Companies might sell their goods and services on account and receives a promise for future collection of cash. The Accounts Receivable account holds a customer’s promise to pay in the future for services or goods sold on account. Arises from a credit sale. The company collects cash from the customer sometime after the sale. The correct answer is A.

Yanıt Açıklaması: Debiting refers to the act of making an entry on the left side of an account

Yanıt Açıklaması: Assets = Liabilities + Owner’s Equity

Yanıt Açıklaması: The time-period concept assumes that unlimited economic life of a company will be divided into regular intervals and that financial statements will be prepared for specific periods such as a month, quarter, or year.

Yanıt Açıklaması: After closing of revenue accounts,expense accounts and Income Summary account, it is timeto prepare post-closing trial balance as the ending step in the accounting cycle. Post-closing trial balance shows the accounts with only balances. As the revenue accounts, expense accounts and Income Summary accounts were closed, it means that they have no balances. So, in the post-closing trial balance those type of accounts will not take place. Assets, liabilities and Capital accounts are the only accounts that have balances left at the end of the period.

Yanıt Açıklaması: In accrued expense, expense is recognized before the cash is paid.

Yanıt Açıklaması: A chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger. The numbering system usually starts with the balance sheet accounts and follows with the income statement accounts.

Yanıt Açıklaması: Income Statement shows the profit or loss of the company. So, how does profit or loss occur? The positive difference between revenues and expenses give profit whereas the negative difference gives the loss. So, in the income statement company reports revenues, expenses and their differences.

Yanıt Açıklaması: Residual value as land has an indefinite useful life, it is not subject to depreciation.

Yanıt Açıklaması: Accounting Standards are a set of principles companies follow when they prepare and publish their financial statements They provide a systematic, standardized, way of describing the company’s financial performance.

Yanıt Açıklaması: Revenues increase on right side by crediting while decrease on left side by debiting and normally show credit balance

Yanıt Açıklaması: A note payable is the opposite of a Note Receivable. The Notes Payable account includes the amounts the company must pay because the company signed a written promise to pay a debt amount in the future. Notes payable, like notes receivable, usually involves interest.

Yanıt Açıklaması: In accrued expense, expense is recognized before the cash is paid. The correct answer is E.

Yanıt Açıklaması: An adjusted trial balance is a list of all the accounts with their adjusted balances. The purpose is to ensure that total debit balances are equal to total credit balances in the ledger after all adjustments.

Yanıt Açıklaması: The 12-month accounting period used for the annual financial statements is called as fiscal year. The correct answer is D.

Yanıt Açıklaması: Managers of a company who plan, organize, and run the business are the most important group of internal users. Managers have different roles and these roles determine the main needs for using financial information. There are several types of external users and they can be individuals or organizations outside a company such as investors, creditors, taxing authorities, government, customers, suppliers etc.