chapter3b - Chapter 3b 1. Accountants divide the economic...

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Chapter 3b 1. Accountants divide the economic life of a business into artificial time periods because of the time period assumption. A. True B. False 2. The revenue recognition principle dictates that companies recognize revenue in the accounting period before it is earned. A. True B. False 3. A company must make adjusting entries every time it prepares financial statements. A. True B. False 4. Prior to adjustment for prepaid expenses, assets are understated and expenses are overstated. A. True B. False 5. Accumulated Depreciation is an asset account. A. True B. False 6. Prior to adjustment for unearned revenues, liabilities are understated and revenues are overstated. A. True B. False 7. An adjusting entry for accrued expenses increases an expense and also increases a liability account. A. True B. False 8. Every adjusting entry affects one balance sheet account and one income statement account. A. True B. False 9. Companies can prepare financial statements directly from an adjusted trial balance. A.
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chapter3b - Chapter 3b 1. Accountants divide the economic...

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