Chapter 3 Review Packet Solution(1).docx - Chapter 3 Review Packet 1 True\/False Unearned revenue is revenue False It is a liability 2 True\/False Revenue

Chapter 3 Review Packet Solution(1).docx - Chapter 3 Review...

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Chapter 3 Review Packet: 1) True/ False : Unearned revenue is revenue False: It is a liability 2) True/ False : Revenue is recognized when cash is received in advance of a services performed Revenue is recognized when earned (work is completed) 3) True /False: Revenue is recognized when services are performed in advance of cash being received Revenue is recognized when earned (work is completed) 4) True /False: Revenue is increased with a “credit.” 5) True /False: Expenses are increased with a “debit” 6) How will the recording of revenue impact each financial statement? (ignore cash flow statement) Increasing revenue -> increases Net Income -> Increases RE -> Increases SE 7) How will the recording an expense impact each financial statement? (ignore cash flow statement) Increasing Expenses -> decreases NI -> decreases RE -> decreases SE 8) What is the purpose of a t account? Visual method to determine the ending balance in an account 9) What is the difference between a trial balance and a balance sheet? Trial balance is the accumulation of all of the T-accounts and is an intermediary step prior to the financial statement creation. The financial statements include the balance sheet.
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