Reference no: EM131266470
1. The ending balance in retained earnings is shown in the _______________.
income statement
statement of retained earnings
balance sheet
both (b) and (c)
both (a) and (c)
(a), (b), and (c)
2. If $3,000 has been earned but not yet paid to a company's workers since the last payday within an accounting period, the necessary adjusting entry at the end of that accounting period would be _______________.
debit an expense and credit a liability
debit an expense and credit an asset
debit a liability and credit an asset
debit a liability and credit an expense
3. The accrual basis of accounting _______________.
recognizes revenues only when cash is received
is used by almost all companies
recognizes expenses only when cash is paid out
recognizes revenues when sales are made or services are performed, and recognizes expenses only when cash is paid out
4. The need for adjusting entries is based on _______________.
the matching principle
source documents
the cash basis of accounting
activity that has already been recorded in the proper accounts
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