The adjusting entry to record a contingent liability requires a debit to a loss (or expense) account and credit to a liability. TRUE OR FALSE?

Q: Under the double-entry system of accounting, a debit represents a decrease to a liability account.…

A: Debit and credit: The transactions of the company will affect the account balances either by…

Q: Accounts payable and accrued liabilities are interchangeable account titles.

A: Accounts payable: accounts payable is the amount that have to be paid to the supplier of goods or…

Q: Payment must be probable in order for a compensated absence to be accrued. True False

A: The term "probable" is pivotal in the context of accruing liabilities, especially concerning…

Q: The simplest way to account for an uncollectible account is to use the allowance method. False True

A: The bad debt expense can be recorded in the books using two methods:Direct write off methodAllowance…

Q: The direct write-off method records bad debt expense when an account is determined to be…

A: Answer is true

Q: The accrual basis of accounting requires adjustments to be made for prepaid, unearned, and accrued…

A: Adjustments in accounting are made at the end of the period in order to show the correct financial…

Q: Which one of the following category unearned revenue belong to? a. Limited liability b. Current…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Allowance for Doubtful Accounts will appear on the balance sheet as a. a contra asset. a. a contra…

A: Allowance for doubtful accounts is prepared for the estimated uncollectible accounts in the future.…

Q: Do you believe the accuracy of the prepaid accounting balance can be determined by examining, the…

A: To determine the accuracy of the prepaid accounting balance, one needs to examine various factors…

Q: uUnder the double-entry system of accounting, a debit represents a decrease to a liability account.…

A: Journal entry is the practice of recording commercial transactions for the first time in the books…

Q: When a liability is paid, which account should be credited? A, Cash B.Accounts payable

A: Cash (money or coins) is legal tender that may be used to exchange products, debts, or services. It…

Q: What is the normal balance for liability accounts?

A: Liability is an obligation that an entity has to pay to its creditors, lenders, suppliers etc.

Q: is the postclosing trial balance not designed to verify

A: The Answer :

Q: ndicate if it is an accounting mistake and provide an explanation for why it is or is not.

A: The Answer

Q: Income taxes payable is an example of an accrued liability. a. True b. False

A: The liabilities are the amount due to paid by the business in future period. The current liabilities…

Q: Is there a certain order to list the liability accounts in the balance sheet?

A: A liability is an obligation the settlement of which requires outflow of economic resources of the…

Q: What other steps should be taken to make sure that the remaining balance in the prepaid account for…

A: Prepaid expenses are expenses that have been paid in advance but have not yet been incurred or…

Q: Contingent liabilities are not recorded in the financial statements. True False

A: As per IAS 37, Provisions, contingent assets and contingent liabilities  A contingent liability is a…

Q: Which of the following would not be a correct form for an adjusting entry? a. A debit to a revenue…

A: There are three golden rules in accounting- a) Debit what comes in and credit what goes out- for…

Q: If an account payable is left off the end of the period balance, what are the possible other…

A:

Q: Why is a service expense a good account for recording a fictitious expense?

A: Fictitious Expense:  Fictitious expense has no tangible existence or any value, but it is created in…

Q: A basic difference between loss contingencies and “real”liabilities is: a. Liabilities stem from…

A: Contingency is a liability that may arise in the future while the real liability has already…

Q: What are “liability gains and losses,” and how are theyaccounted for?

A: Liability gains and losses arise from the unexpected increase or decrease in the value of projected…

Q: Which one of the following is a special type of liability? a. Accrued expenses b. Salaries payable…

A: Accrued expense: These are those expenses which due but not yet paid.This is short term liability…

Q: Is a transaction that has the effect of lowering an asset recorded as a debit or as a credit? Is the…

A: A transaction is a business engagement that has an economic effect on a financial statement and is…

Q: Which of the following would NOT be shown in the Statement of Profit or Loss? Expired portion of…

A: Income statement shows the income earned and loss incurred by the organization in the financial…

Q: Correcting a prior period entry requires a prior period adjustment to what account?

A: Prior period adjustment entry is an entry recorded in the current year to modify or correct an entry…

Q: Distinguish the difference between Bad Debts and Provision for Doubtful Debts, indicating the…

A: When a account receivable is clearly identified as the amount will not be received then such account…

Q: Why does the Bad Debts Expense account usually not have the same adjusted balance as the Allowance…

A: The amount which is due or receivable from another party for payment is known as receivable, it…

Q: When is bad debts expense recorded when using the direct write-off method?

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: If a payment of a deferred expense was recorded under the alternative treatment, what account would…

A: Deferred expense:   Advance payment for future expenses is called as prepaid expenses. These prepaid…

Q: When is bad debts expense recorded when using the allowance method?

A:

Q: How is accidental loss of goods treated in final account in case: a: Goods had not been insured or…

A: Accidental loss:   It is a loss incurred by a sudden or unexpected incident to the company. Accident…

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.