3.9: Discussion Questions
- Page ID
- 30385
\( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \) \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)\(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\) \(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\)
- Explain the sequence of financial transactions that occur continuously during an accounting time period. What is this sequence of activities called?
- Do you have to wait until the operating cycle is complete before you can measure income using the accrual basis of accounting?
- What is the relationship between the matching concept and accrual accounting? Are revenues matched to expenses, or are expenses matched to revenues? Does it matter one way or the other?
- What is the impact of the going concern concept on accrual accounting?
- Identify three different categories of expenses.
- What are adjusting entries and why are they required?
- Why are asset accounts like Prepaid Insurance adjusted? How are they adjusted?
- How are plant and equipment asset accounts adjusted? Is the procedure similar to the adjustment of other asset and liability accounts at the end of an accounting period?
- What is a contra account and why is it used?
- How are liability accounts like Unearned Repair Revenue adjusted?
- Explain the term accruals. Give examples of items that accrue.
- Why is an adjusted trial balance prepared?
- How is the adjusted trial balance used to prepare financial statements?
- List the eight steps in the accounting cycle.
- Which steps in the accounting cycle occur continuously throughout the accounting period?
- Which steps in the accounting cycle occur only at the end of the accounting period? Explain how they differ from the other steps.
- Give examples of revenue, expense, asset, and liability adjustments.
- In general, income statement accounts accumulate amounts for a time period not exceeding one year. Why is this done?
- Identify which types of general ledger accounts are temporary and which are permanent.
- What is the income summary account and what is its purpose?
- What is a post-closing trial balance and why is it prepared?