Question

True/False

1. _____ The number of accounts on the chart of accounts is strictly limited.
2. _____ Every account on the chart of accounts must be identified by one of the accounting elements
3. _____ An account on the chart of accounts could be both a liability and a revenue.
4. _____ The term prepaid is usually associated with an asset account.
5. _____ Unearned revenue would usually be listed in the asset section of a chart of accounts.
6. _____ The FASB dictates to companies what their chart of accounts must look like.
7. _____ The accounting equation stays in balance except when dealing with dividends.
8. _____ Gains and losses are listed under retained earnings because they change the amount of retained earnings.
9. _____ Paying cash for prepaid insurance will not change retained earnings.
10. _____ Using electricity in June and receiving a bill from the electric company in June will result in an increase in assets during June.
11. _____ Selling inventory for a price more than what was paid will increase retained earnings.
12. _____ Amounts to be reported on the financial statement come from the accounting equation worksheet.
13. _____ Accounts receivable at the end of 2020 would become the beginning balance for accounts receivable in 2021.
14. _____ Cost of Goods Sold for the year 2020 would become the beginning balance for Cost of Goods Sold in 2021.
15. _____ Every total from the accounting equation worksheet will have a place to go on the financial statements.
16. _____ When unearned revenue is earned, liabilities are decreased.
17. _____ For revenue recognition the transaction price is adjusted for discounts and rebates that are most likely to take place.
18. _____ Allocating the transaction price to the performance obligations is not necessary if there is only one performance obligation.

Answer 1

1. The number of accounts on the chart of accounts is strictly limited.

Answer: False

2.Every account on the chart of accounts must be identified by one of the accounting elements

Answer: True

3. An account on the chart of accounts could be both a liability and a revenue.

Answer: False

4.The term prepaid is usually associated with an asset account.

Answer: True

5.Unearned revenue would usually be listed in the asset section of a chart of accounts.

Answer: True

6. The FASB dictates to companies what their chart of accounts must look like.

Answer: False

7. The accounting equation stays in balance except when dealing with dividends.

Answer: False
8. Gains and losses are listed under retained earnings because they change the amount of retained earnings.

Answer: True

9. Paying cash for prepaid insurance will not change retained earnings

Answer: False

10. Using electricity in June and receiving a bill from the electric company in June will result in an increase in assets during June.

Answer: False

11. Selling inventory for a price more than what was paid will increase retained earnings

Answer: True

12.  Amounts to be reported on the financial statement come from the accounting equation worksheet

Answer: False

13. Accounts receivable at the end of 2020 would become the beginning balance for accounts receivable in 2021

Answer: True

14. Cost of Goods Sold for the year 2020 would become the beginning balance for Cost of Goods Sold in 2021

Answer: False

15.Every total from the accounting equation worksheet will have a place to go on the financial statements

Answer: True

16. When unearned revenue is earned, liabilities are decreased.

Answer: False

17. For revenue recognition the transaction price is adjusted for discounts and rebates that are most likely to take place.

Answer: True

18.Allocating the transaction price to the performance obligations is not necessary if there is only one performance obligation

Answer: False