Chapter 3: Q3-2DQ (page 139)
Question: Why is the accrual basis of accounting generally preferred over the cash basis?
Answer:
Accrual basis is preferred over the cash basis because accrual basis is more accurate and gives the true and fair pictures of accounting records.
Over 22 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity
2. Depreciation expense—Building
In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity
9. Prepaid insurance
In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.
A. Current assets E. Current liabilities
B. Long-term investments F. Long-term liabilities
C. Plant assets G. Equity
D. Intangible assets
10. Office equipment
The ledger of Mai Company includes the following accounts with normal balances: Common Stock,
\(9,000; Dividends, \)800; Services Revenue, \(13,000; Wages Expense, \)8,400; and Rent Expense, $1,600.
Prepare the necessary closing entries from the available information at December 31.
In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.
A. Current assets E. Current liabilities
B. Long-term investments F. Long-term liabilities
C. Plant assets G. Equity
D. Intangible assets
8. Current portion of long-term note payable
What do you think about this solution?
We value your feedback to improve our textbook solutions.
