11. Why are adjusting entries necessary in an accrual accounting system? What are some common examples?
12. What effect does the recording of revenue normally have on total assets?
13. What effect does providing services on account have on the statement of cash flows? The balance sheet?
14. Describe the purpose of the closing process.
15. Describe the difference between temporary and permanent accounts, and state which ones are closed.
Learning Objective 02-04
16. Define the accounting cycle and list the stages of the cycle.
Learning Objective 02-04
17. Explain the meaning of the term, "matching concept."
Learning Objective 02-04
18. The temporary accounts are closed prior to the start of the next accounting cycle. In this closing process, the amounts in each of these accounts are transferred to what other account(s)?
Learning Objective 02-04
19. What is the "fraud triangle"?
20. Discuss the importance of ethics in the accounting profession.
Multiple Choice Questions