SOLUTION Problem 4-2

SOLUTION Problem 4-2 - Statement, and some of the revenue...

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Problem 4-2 Solution – True / False Questions for Chapter 4 T rue or F alse T 1. Revenue accounts will always start each new accounting period with zero beginning balances. F 2. Expense accounts will always start each new accounting period with a beginning balance equal to all of the debit entries that were made into the expense account during the previous accounting period. T 3. Credit entries into the Sales Revenue account increase the account balance and will ultimately increase Retained Earnings. T 4. Debit entries into an expense account increase the expense account and will ultimately decrease Retained Earnings. F 5. The Cost of Goods Sold account is an asset account similar to the Inventory account. F 6. Some of the revenue and expense accounts are used to prepare the Income
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Unformatted text preview: Statement, and some of the revenue and expense accounts appear on the Balance Sheet. T 7. If there was no need to prepare the Income Statement then there would be no need to have revenue and expense accounts. T 8. A company will have a Net Loss when the sum of all the expense accounts is greater than the sum of all the revenue accounts. F 9. When a sale is made to a customer on credit, there is no entry made to the Sales Revenue account because no cash has been received. T 10. The Retained Earnings amount needed for the Balance Sheet can be calculated as follows: Retained Earnings at the beginning of the period, plus the sum of the revenue account balances, less the sum of the expense account balances....
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This note was uploaded on 10/20/2011 for the course ACC 221 taught by Professor Wiegand during the Spring '08 term at Miami University.

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