Cash will be debited for $600. d) $800. Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. Wages expense will be debited for $4,000. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. C. Prepaid expenses are expenses paid and already incurred. Match the statements below with the appropriate terms: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses Statements: 1. Salaries expense would be debited for $3,500. a) revenue being understated b) Unearned revenues refer to cash received in advance of providing a service or product. g) Six months of rent were paid in advance. They refer to earnings which have been earned, but not yet The compensation could be a cash payment or a . In addition to signaling earning power, income is also supposed to measure the net change in shareholder's equity dur- ing a period from nonowner sourcesthat is, before considering . g) Six months of rent were paid in advance. a) The adjusted trial balance is used to prepare financial statements. An adjusted trial balance To record this period's depreciation expense. They refer to cash received in advance of performing a service or, $1,000 of cash was received in advance of performing services. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. $300 were used during the month. Accumulated depreciation. An unclassified balance sheet is one whose items are broadly grouped into assets, liabilities, and equity. For the current year, Bubbles Office Supply had earned $600 of interest on investments. c) Record receipt with a credit to the Rent revenue account. d) It reports amounts owed to employees and is an asset. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Unearned revenue is a term in which the transactions that are related to the receiving of money could be considered for the service or product to be provided or delivered. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. For Amazon, Freds payment ($79) is unearned revenue since the company receives the full payment in advance while none of the services have been provided to Fred yet. Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. Check each other's answers when you are finished. (Check all that a) The income statement is the first financial statement prepared after preparing the adjusted trial balance. (Check all that apply.). By the end of the period, $300 had not yet been earned. They refer to revenues that are earned in a period, but have not been received and are unrecorded. Accounts payable Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? They are reported on a balance sheet. Multiple select question. lawyers will give an initial consultation that is free. c) December 1 to December 31 (Check all that apply.). -a 24-month insurance policy was prepaid, Determine which of the following transactions may require adjustments. ), Which of the following describe the salaries payable account? Cash Identify which group of accounts may require adjustments at the end of the accounting period. c) December 31 Office supplies, Identify which of the accounts below would be classified as a current asset. . Multiple choice question. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. (Check all that apply.). (Check all that apply. b. $1,000 of cash was received in advance of performing services. a) remove the earned amount to a revenue account Multiple select question. $1,000 of supplies were purchased at the beginning of the month. b) Accounts receivable will be credited for $400. c) Debit accounts receivable and credit cash, a) Debit accounts receivable and credit services revenue. Rather than debiting an asset account, which of the following statements explains an alternate recording procedure to journalize prepaid expenses, such as prepaid rent or supplies. -Links accounts and adjustments to financial statements Unearned revenue, also known as deferred revenue, is a customer's advance payment for a product or service that has yet to be provided by the company. For the current year, a business has earned (but not recorded or received) $200 of interest from investments. a) Debit accounts receivable and credit services revenue Multiple choice question. At the end of the previous year, a customer owed Days Company $400. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Identify which group of accounts may require adjustments at the end of the accounting period. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. -The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. Rather than debiting an asset account, which of the following statements explains an alternate recording procedure to journalize prepaid expenses, such as prepaid rent or supplies. g) New accounts may need to be added because of the adjusting process. Explain what unearned revenues are by selecting the statements below which are correct. Prepare the income statement for the month of April 30. d) Debit Prepaid insurance for $400. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Supplies expense would be debited for $300. O A liability on the balance sheet. -Taxes payable The accounting cycle is repeated each reporting period and refers to the steps taken in preparing financial statements. Illustrate your understanding of how to use the adjusted trial balance to prepare a statement of owner's equity by completing the following sentence. (Check all that apply.) A plant asset refers to a long-term tangible asset used to produce and sell products or services. d) $73.97. (Check all that apply.) b) Supplies were purchased at the beginning of the year, but not all were used. b) The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. Adjustments involve increasing both an expense and a liability account. service revenue, What is the date primarily used in adjusting entries? 1. prepare an unadjusted trial balance Determine which of the following transactions may require adjustments. As of December 31, none of this interest had been received or recorded. b) debit interest payable and credit cash View Explain what unearned revenues are by selecting the statements below which are correct.png from ACCT 301 at American River College. -The adjustment can be squeezed in on one line of the trial balance. (Check all that apply.). You can also search the Web using the term approved credit counseling agencies. c. Book value. a) Service revenue would be credited for $700. A revenue not yet recognized; collected in advance. -They refer to earnings which have been earned but not yet billed. Service revenue would be credited for $400. Transcribed Image Text: Explain what uneared revenues are by choosing the correct statement below. (Check all that apply.) f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. -The accounting cycle is a series of steps repeated each reporting period. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. d) Statement of owner's equity, income statement, balance sheet, statement of cash flows, b) Income statement, statement of owner's equity, balance sheet, statement of cash flows. D) The normal balance of an expense account is a credit. Which of the following is the proper adjusting entry? A work sheet is a helpful tool which may be used to help prepare financial ________. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. c) Debit Interest revenue for $600. Insurance expense would be debited for $300. (Check all that apply.). They refer to cash received in advance of performing a service or product. (Check all that apply.). Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. Explain what unearned revenues are by selecting the statements below which are correct. Adjustments involve increasing both an expense account and a liability account. d) Adjustments are entered in a middle column titled Adjustments. Supplies expense would be debited for $600. Provide an example as well of an accrued revenue. -They are a liability. d) Adjustments involve increasing both an expense and a liability account. d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. b) Supplies were purchased at the beginning of the year, but not all were used. In simple terms, unearned revenue is the prepaid revenue from a customer to a business for goods or services that will be supplied in the future. Select the statements below that describe the purpose of a post-closing trial balance. a) Rent was paid for the month. -The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. c) Profit margin is a useful measure of a business's operating results. Unearned Revenue. Wages expense, Interest expense -Most companies use a one-year period or operating cycle in deciding which assets and liabilities are current. Which statements below are true regarding permanent and temporary accounts? The entire $3,000 goes into the Unearned Revenue account because you've been paid for work you have not yet completed. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. The rationale behind this is that despite the company receiving payment from a customer, it still owes the delivery of a product or service. b) Wages expense, interest expense b) The adjustment causes an increase in an asset account and an increase in a revenue account. b) Service revenue would be credited for $700. Accounting for a refund differs from a reversal. This principle is a major part of the _________ process. Demonstrate the required adjusting entry by choosing the correct statement below. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. -They are reported on an income statement. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. (Check all that apply.) a) $360 Demonstrate the required journal entry on January 3 by selecting from the choices below. Remember revenue is only recognized if a service or product is delivered, a refund nulls recognition. Visit the U.S. Depreciation expense a) The income statement is the first financial statement prepared after preparing the adjusted trial balance. O An unearned revenue on the income statement. Beginning of vear End of vear 14,000 Accounts receivable Inventories Prepaid insurance Prepaid rent Accounts payable Wages payable Unearned rent revenue $10,000 21,000 1,000 2.000 11,000 14,000 9,000 19,000 2,000 1.000 12,000 13,000 7,000 The income statement for the year contains the following: Rent revenue Sales revenue Cost of goods sold Insurance expenSe Rent expense Wages expense 21,000 . a) a list of accounts and balances before adjusting entries have been recorded and posted Explain your understanding of the closing process by choosing the correct statements below. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. Last modified on Wed 27 Apr 2022 18.53 EDT. On December 31, interest expense should be accrued for the following period: f) The ending Owner, Capital account balance on the balance sheet is taken directly from the adjusted trial balance. $1,000 of supplies were purchased at the beginning of the month. By the end of the year, $400 had been earned. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. -Notes receivable due in 2 years Adjusting journal entries are prepared from the Adjustments columns of a work sheet. A plant asset is the portion of a current asset which will be used up in the next accounting period. Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. (Check all that apply. (Check all that apply.). e) Service revenue will be credited for $600. (Check all that apply.). By the end of the accounting period, the loan had been outstanding for 30 days. a. c) Unearned revenues refer to customer payments which have not yet been received. They refer to cash received in advance of. Define the Salaries payable account by selecting the appropriate statement below. Six months of rent were paid in advance. -Long-term investments are sometimes referred to as noncurrent investments. When does the closing process take place? Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. Supplies would be debited for $300. c) $98.63 Record the amount paid by the customer. (Check all that apply.). -Temporary accounts have a balance for one period only. On December 28, I. M. Greasy, Catering completed $600 of catering services. b) $100 What is a work sheet? ), Which of the accounts below would be classified as long-term or fixed assets? -Investments in bonds, Identify the accounts below that would be classified as a long-term investment. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. Explain what unearned revenues are by selecting the statements below which are correct. They are a liability. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes. should be recorded when goods or services are provided to customers at an amount expected to be received. ), cash and other resources that are expected to be sold, collected or used within one year. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Examples of accrued expenses are wages expense and interest expense. Seller's viewpoint: "Accrued revenues " (also called "accrued assets" or unrealized revenues) are revenues earned by the seller for delivery of goods and services before the customer pays for them. a) Salaries expense would be debited for $3,500. (Check all that apply.). (Check all that apply.). d) debit interest expense and credit cash, c) debit interest expense and credit interest payable, StoryBook Company provided services to several customers during the month of December. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. (Check all that apply.) In what ways have certain parties changed the United States? The required adjusting entry would be to debit the ________ (Unearned revenue/Accounts receivable/Cash/Service revenue) account and __________ (debit/credit) the _______ (Unearned revenue/Accounts receivable/Cash/Service revenue) account. Unearned revenues refer to amounts owed to the company that have not yet been billed. It reports sales in two categories, products and services, which then combine to form total net . -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. Take a look at the P&L and then read a breakdown of it below. Building -The value of intangible assets comes from the privileges or rights granted to or held by the owner. c) Debit Unearned revenues for $600. They are a liability. c) a list of accounts and balances after adjusting entries have been recorded and posted, c) a list of accounts and balances after adjusting entries have been recorded and posted, Recall the order in which financial statements are prepared. c) Service revenue would be credited for $300. c) Record all prepaid expenses with debits to expense accounts. d) January 1. -They are also called deferred revenues. Prepare an adjusted trial balance. The Income Summary account is _______ for the sum of all revenue accounts and is ________ for the sum of all expense accounts and its balance will be transferred to the _________ account. -Temporary accounts are reported on the income statement. (Check all that apply.) (Check all that apply. A company borrowed $4,000 from the bank at an interest rate of 9%. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. Consider the following: a. the effects of the Republican Party before and after the Civil War b. the policies of the Democratic Party during the Great Depression. Which of the following statements about the Accumulated depreciation account is (are) correct? When preparing an income statement, revenues will always come before expenses in the presentation. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. $300 were used during the month. Yahoo! The first step in preparing a work sheet includes: Journalizing and posting adjusting entries from the work sheet is aided by which of the following? -Depreciation is the process of allocating the cost of an asset to the period the asset benefits. Supplies expense would be debited for $600. Source: American Journal of Preventive Medicine 424242 (June 2012):5635702012):563-5702012):563570. d) liabilities on the balance sheet will be understated. A reversing entry: (Check all that apply). Salaries payable will be debited for $500. Explain what unearned revenues are by selecting the statements below which are correct. Sharper declares and immediately distributes a 50% stock dividend. apply.). CDORP.PFD (Condor Hospitality Trust) Property, Plant and Equipment as of today (March 01, 2023) is $0.00 Mil. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. a) Salaries expense would be debited for $3,500. 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explain what unearned revenues are by selecting the statements below