ACCT 2000 LOWE-ARDOIN EXAM 2 ACTUAL /UPDATED 2026 SORTED QUESTIONS AND ANSWERS /TOP RATED A+ | Practice Questions | A+ Verified

ACCT 2000 LOWE-ARDOIN EXAM 2 ACTUAL
/UPDATED 2026 SORTED QUESTIONS AND
ANSWERS /TOP RATED A+ | Practice Questions |
A+ Verified
• Which type of accounting is approved by GAAP, cash or accrual basis? -✓✓Accrual
Basis

• Adjusting entries ___________ involve cash. -✓✓never

• What are the two types of adjusting entries? -✓✓deferrals and accruals

• One side of the adjusting entry must come from the _____________ _____________
and the one side must come from the ______________ ___________________. -
✓✓balance sheet; income statement

• Adjusting entries are necessary every time a company prepares a ______________
________________. -✓✓Financial Statement

• Which accounts are adjusted in deferral adjusting entries? -✓✓prepaid expenses and
unearned revenue

• What are examples of prepaid expenses? -✓✓insurance, supplies, and depreciation

• What are examples of unearned revenue? -✓✓unearned service revenue

• If there are no adjusting entries for prepaid expenses, ___________ are overstated
and _____________ are understated. -✓✓assets; expenses

• Journal entries for prepaid expense adjustments debit ___________ accounts and
credit ___________ accounts. -✓✓expense; asset

• If there are no adjusting entries for unearned revenue, ______________ are
overstated and _____________ is understated. -✓✓liabilities; revenue

• ____________ accounts are debited and ____________ accounts are credited in the
adjusting journal entries for unearned revenue. -✓✓liability; revenue

• What are the two types of accrual adjusting entries? -✓✓accrued revenue and
accrued expenses