QUIZ_4 - ACCT-101 new Quiz 4 1. Accruals are needed when an...

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1. Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned. True False 2. If the debit portion of an adjusting entry is to an asset account, then the credit portion must be to a liability account. True False 3. The updating of accounts is called the adjusting process. True False 4. Adjusting entries affect only expense and asset accounts. True False 5. The balance in the prepaid insurance account before adjustment at the end of the year is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000. True False 6. If the adjustment of the unearned rent account at the end of the period to recognize the amount of rent earned is inadvertently omitted, the net income for the period will be overstated. True False 7. If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account, which of the following describes the effect of the credit portion of the entry? decreases the balance of an owner's equity account.
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This note was uploaded on 03/01/2010 for the course ACCT 2301 taught by Professor White during the Spring '08 term at Central Texas College.

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QUIZ_4 - ACCT-101 new Quiz 4 1. Accruals are needed when an...

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