A200 Final Exam Questions and Answers Already Passed Latest Update 2025-2026
The purpose of the accrual basis of accounting is to - Answers improve the matching of revenue
and expense in the proper period
Which of the following financial statement elements is closed at the end of an accounting cycle?
- Answers Revenue
The recognition of an expense may be accompanied by which of the following? - Answers An
increase in liabilities
Recording accrued salary expense at the end of an accounting period causes an increase in
Salaries Expense and... - Answers an increase in a liability
Which of the following does not involve a deferral? - Answers Recording salaries of employees
earned but not yet paid
A firm purchases assets on credit. This transaction... - Answers increases both assets and
liabilities
A firm pays an account payable. This transaction... - Answers decreases both assets and
liabilities
An accrued... - Answers revenue has been earned but not collected
Which of the following accounts is a permanent account (an account that is not closed)? -
Answers Prepaid insurance
Which of the following accounts is a temporary account? - Answers subscription revenue
The matching concept refers to the "matching" of: - Answers expenses and revenues
Which of the following transactions involves a deferral? - Answers recording the prepayment of
three months' rent
The adjustment to record the completion of services for which clients had paid in advance
would involve which of the following? - Answers decreases assets and stockholders' equity
Paying for a two-year insurance policy in advance will have what impact on a company's
account classifications? - Answers this transaction will have no impact on major classification
totals
Under the accrual basis of accounting - Answers events that change a company's financial
statements are recognized in the period they occur rather than in the period in which cash is
paid or received
Gross profit is the difference between... - Answers net sales & COGS
The purpose of the accrual basis of accounting is to - Answers improve the matching of revenue
and expense in the proper period
Which of the following financial statement elements is closed at the end of an accounting cycle?
- Answers Revenue
The recognition of an expense may be accompanied by which of the following? - Answers An
increase in liabilities
Recording accrued salary expense at the end of an accounting period causes an increase in
Salaries Expense and... - Answers an increase in a liability
Which of the following does not involve a deferral? - Answers Recording salaries of employees
earned but not yet paid
A firm purchases assets on credit. This transaction... - Answers increases both assets and
liabilities
A firm pays an account payable. This transaction... - Answers decreases both assets and
liabilities
An accrued... - Answers revenue has been earned but not collected
Which of the following accounts is a permanent account (an account that is not closed)? -
Answers Prepaid insurance
Which of the following accounts is a temporary account? - Answers subscription revenue
The matching concept refers to the "matching" of: - Answers expenses and revenues
Which of the following transactions involves a deferral? - Answers recording the prepayment of
three months' rent
The adjustment to record the completion of services for which clients had paid in advance
would involve which of the following? - Answers decreases assets and stockholders' equity
Paying for a two-year insurance policy in advance will have what impact on a company's
account classifications? - Answers this transaction will have no impact on major classification
totals
Under the accrual basis of accounting - Answers events that change a company's financial
statements are recognized in the period they occur rather than in the period in which cash is
paid or received
Gross profit is the difference between... - Answers net sales & COGS
