Accounting 2000 Letitia Lowe-Ardoin
Midterm Exam Questions 100%Well
Answered.
Accrual-basis accounting - Answer Accounting basis in which companies record, in the periods
in which the events occur, transactions that change a company's financial statements, even if
cash was not exchanged.
accrued expenses - Answer expenses incurred but not yet paid in cash or recorded
Accrued revenues - Answer revenues for services performed but not yet received in cash or
recorded
Adjustments - Answer Changes made to accounts at the end of an accounting period to ensure
that the revenue recognition and expense recognition principles are followed.
Book value - Answer the difference between the cost of a depreciable asset and its related
accumulated depreciation
Cash-basis accounting - Answer Accounting basis in which a company records revenue only
when it receives cash and an expense only when it pays cash.
Contra asset account - Answer an account that is offset against an asset account on the
balance sheet
Depreciation - Answer The process of allocating the cost of an asset to expense over its useful
life.
Expense recognition principle - Answer .The principle that companies recognize expense in the
period in which they make efforts (consume assets or incur liabilities) to generate revenue.
Fiscal year - Answer an accounting period that is one year long
Periodicity assumption - Answer An assumption that the economic life of a business can be
, Revenue recognition principle - Answer The principle that companies recognize revenue in the
accounting period in which the performance obligation is satisfied.
Unearned revenues - Answer cash received and a liability recorded before services are
performed
Useful life - Answer The length of service of a productive asset
Bank reconciliation - Answer The process of comparing the bank's account balance with the
company's balance, and explaining the differences to make them agree.
Bank statement - Answer a statement received monthly from the bank that shows the
depositor's bank transactions and balances
Bonding - Answer obtaining insurance protection against theft by employees
Cash - Answer Resources that consist of coins, currency, checks, money orders, and money on
hand or on deposit in a bank or similar depository.
Cash budget - Answer A projection of anticipated cash flows, usually over a one- to two-year
period.
Cash equivalents - Answer Short-term, highly liquid investments that can be readily converted
to a specific amount of cash and which are relatively insensitive to interest rate changes.
Deposits in transit - Answer deposits recorded by the depositor that have not been recorded
by the bank
Electronic funds transfer (EFT) - Answer A disbursement system that uses wire, telephone, or
computer to transfer cash from one location to another.
Fraud - Answer A dishonest act by an employee that results in personal benefit to the
employee at a cost to the employer.
Midterm Exam Questions 100%Well
Answered.
Accrual-basis accounting - Answer Accounting basis in which companies record, in the periods
in which the events occur, transactions that change a company's financial statements, even if
cash was not exchanged.
accrued expenses - Answer expenses incurred but not yet paid in cash or recorded
Accrued revenues - Answer revenues for services performed but not yet received in cash or
recorded
Adjustments - Answer Changes made to accounts at the end of an accounting period to ensure
that the revenue recognition and expense recognition principles are followed.
Book value - Answer the difference between the cost of a depreciable asset and its related
accumulated depreciation
Cash-basis accounting - Answer Accounting basis in which a company records revenue only
when it receives cash and an expense only when it pays cash.
Contra asset account - Answer an account that is offset against an asset account on the
balance sheet
Depreciation - Answer The process of allocating the cost of an asset to expense over its useful
life.
Expense recognition principle - Answer .The principle that companies recognize expense in the
period in which they make efforts (consume assets or incur liabilities) to generate revenue.
Fiscal year - Answer an accounting period that is one year long
Periodicity assumption - Answer An assumption that the economic life of a business can be
, Revenue recognition principle - Answer The principle that companies recognize revenue in the
accounting period in which the performance obligation is satisfied.
Unearned revenues - Answer cash received and a liability recorded before services are
performed
Useful life - Answer The length of service of a productive asset
Bank reconciliation - Answer The process of comparing the bank's account balance with the
company's balance, and explaining the differences to make them agree.
Bank statement - Answer a statement received monthly from the bank that shows the
depositor's bank transactions and balances
Bonding - Answer obtaining insurance protection against theft by employees
Cash - Answer Resources that consist of coins, currency, checks, money orders, and money on
hand or on deposit in a bank or similar depository.
Cash budget - Answer A projection of anticipated cash flows, usually over a one- to two-year
period.
Cash equivalents - Answer Short-term, highly liquid investments that can be readily converted
to a specific amount of cash and which are relatively insensitive to interest rate changes.
Deposits in transit - Answer deposits recorded by the depositor that have not been recorded
by the bank
Electronic funds transfer (EFT) - Answer A disbursement system that uses wire, telephone, or
computer to transfer cash from one location to another.
Fraud - Answer A dishonest act by an employee that results in personal benefit to the
employee at a cost to the employer.
