Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Examples of accrued expenses are wages expense and interest expense. Statement of Owner's Equity (Retained Earnings) Unearned revenue can be thought of as a "prepayment" for goods or services . They are a liability. Prepare the income statement for the month of April 30. d) Adjustments are entered in a middle column titled Adjustments. They are reported on an income statement. Accounts receivable is not involved. As of December 31, none of this interest had been received or recorded. c) The date is unimportant 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. Yahoo! -Examples of accrued expenses are wages expense and interest expense. Credit Unearned revenues for $400. Identify which group of accounts may require adjustments at the end of the accounting period. (Check all that The company immediately debited the Insurance expense account. 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. b. In this free session, the client explains her or his situation, and the attorney evaluates the options. -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. Explain what unearned revenues are by choosing the correct statement below. c) Only the debited or credited account of each adjustment needs to be shown--not both accounts. -A temporary account has a balance for only one period. -The value of intangible assets comes from the privileges or rights granted to or held by the owner. -The adjustment can be added to a blank line. (Check all that apply.) C) The normal balance of unearned revenues is a credit. The required adjusting entry would be to debit the ________ (Unearned revenue/Accounts receivable/Cash/Interest receivable) account and __________ (debit/credit) the _______ (Cash/Accounts receivable/Interest revenue/Interest receivable) account. According to Allan Johnson, what does sociological practice offer? d) $800. ), -Land held for future expansion In some cases, bankruptcy may be the only course available. A company borrowed $4,000 from the bank at an interest rate of 9%. apply.) Journalize the adjusting entries for the month and prepare the adjusted trial balance. Unearned revenue, sometimes referred to as deferred revenue, is payment received by a company from a customer for products or services that will be delivered at some point in the future. In what ways have certain parties changed the United States? D. Accrued expenses are expenses already incurred but not yet paid. -Profit margin is also called return on sales. below which are correct. 1. (Check all that apply.) -The income statement is the first financial statement prepared after preparing the adjusted trial balance. d) Credit Accounts receivable for $600. The time span from when cash is used to purchase goods until cash is received from the sale of goods is called the _______ cycle, Accounts receivable 83) Identify the statement below that is incorrect. Demonstrate the required adjusting entry by choosing the correct statement below. Register Now. What is the purpose of the Accumulated Depreciation account? ), -Mortgage payable -Depreciation is recorded through an adjusting entry. They refer to earnings which have been earned, but not yet billed. Unearned revenues refer to customer payments which have not yet been received. e) Salaries payable will be credited for $500. Using the double-declining-balance method of depreciation, calculate the following amounts for the car for each of the four years of its expected life: a. f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Example of Unearned Revenue Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. Multiple choice question. b) If prepaid expense was initially recorded as an asset, then assets will be higher on the balance sheet. If an adjusting entry for unearned revenue is not recorded, what is the effect on the financial statements? -Reduces the risk of errors when working with many accounts and adjustments, What are the benefits of using a work sheet? d) liabilities on the balance sheet will be understated. Calculate the first month's depreciation expense as of December 31 using the straight-line method. 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. b) The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. a) Rent was paid for the month. -Profit margin is the ratio of a business's net income to its net sales. They refer to cash received in advance of performing a service By the end of the accounting period, the loan had been outstanding for 30 days. d) Accounts receivable will be credited for $500. c) Cash; Notes receivable; Land, a) Unearned revenue; Supplies; Prepaid rent. ), Accrual basis accounting is defined as: (Check all that apply.). Salaries payable will be debited for $500. Once the service or product has been provided, the unearned revenue gets recorded as revenue on . They are reported on a balance sheet. Adjustments involve increasing both an expense and a liability account. By the end of the year, $400 had been earned. (Check all that apply.). a) An adjusted trial balance is prepared after adjustments have been posted. Demonstrate the required adjusting journal entry by selecting from the choices below. (Put the first step at the top.) c) Debit Insurance expense $400. where xxx is the number of years after 198019801980. (Check all that apply.) Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Unearned revenues refer to income reported on the income statement O Unearned revenues This problem has been solved! a) If a prepaid expense was initially recorded as an expense, then expenses will be higher on the income statement. -Temporary accounts have a balance for one period only. c) Debit Accounts receivable for $600. -It has a life within the business greater than one year. Multiple select question. c) Unearned revenues refer to customer payments which have not yet been received. O A liability on the balance sheet. a) They are reported on an income statement. Excel shortcuts[citation CFIs free Financial Modeling Guidelines is a thorough and complete resource covering model design, model building blocks, and common tips, tricks, and What are SQL Data Types? Trademark $300 were used during the month. Long-term liabilities are debts of a business that are not due to be settled within one year. Demonstrate the required adjusting entry by choosing the correct statement below. Which statements below are true regarding permanent and temporary accounts? -Equipment was purchased in the middle of the year. It reports amounts owed to employees and is an asset. -Any unused prepaids existing at end of period are transferred to asset accounts. Describe the final step in the adjusting process. By the end of the accounting period, the loan had been outstanding for 30 days. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. What is an intangible asset? Supplies expense would be debited for $700. (Check all that apply.) Unearned revenue is listed as a current liability because it's a type of debt owed to the customer. The revenue recording in the accounting books of an entity is necessary to calculate the net income. 46. -Taxes payable d) Owner, capital, Owner withdrawal. They are also called accounts receivable. journalize Which of the accounts below are considered accrued expenses? Able Company owes interest on a note for a loan. All adjustments can easily be seen in the _______ trial balance columns and then an ________ trial balance can be prepared. Which of the, An advance payment of $1,000 for services was received on December 1 and. The adjusted trial balance is used to prepare financial statements. (Check all that apply.). 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. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). Which of the following accounts is considered a prepaid expense? interest revenue. Dazzle expects the car to have a useful life of four years with an estimated residual value of zero at the end of the four years. An adjusted trial balance An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Blank 2: credit b) Unearned revenues refer to cash received in advance of providing a service or product. a) Debit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 Accounting reporting principles state that unearned revenue is a liability for a company that has received payment (thus creating a liability) but which has not yet completed work or delivered goods. Which of the statements below explains the accounting cycle? (Check all that apply.). e) Total assets will be increased. List of Excel Shortcuts ), $1,000 of supplies were purchased at the beginning of the month. Debit Unearned revenues for $600. b) It reports amounts owed to employees and is a liability. Which of the following statements correctly define(s) a profit margin? -The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. Select the statement below that explains how to use the Income Summary account. Service revenue would be credited for $700. (Check all that apply.). At the end of January, you've earned the first of the three month's income or . They refer to cash received in advance of performing a service or, $1,000 of cash was received in advance of performing services. They refer to cash received in advance of performing a service or product. Calculate the amount of interest to accrue if the loan has been outstanding for 45 days. c) Debit Interest revenue for $600. This principle is a major part of the (timing/adjusting/estimating) process. a) Debit Unearned revenues for $400. billed. b) credit accounts payable c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. By the end of the period, $300 had not yet been earned.$1,000 of cash was received in advance of performing services. Unearned Revenue Dec. 31 Unearned Revenue (Amount earned as of year-end) Fees Earned Deferred Expenses (also referred to as prepaid expenses) are initially recorded as assets and adjusted at the end of the period for the portion that has been used up or expired. Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. -Plant assets are equipment and other assets that have a life greater than one year. a) revenue being understated (a) prepaid expense (b) unearned revenue (c) accrued revenue (d) accrued expense A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. -One purpose is to verify that total debits equal total credit for permanent accounts. (Check all that apply.) -Depreciation is the original cost of an asset minus any residual value and this amount is expensed over its useful life. Which of the following accounts is considered a prepaid expense? Explain what unearned revenues are by selecting the statements below which are correct. Multiple choice question. Since $300 has not been earned, it means that $700 has been earned. apply.). Supplies expense would be credited for $300. -the closing process helps to summarize a period's revenues and expenses. By the end of the period, $400 of the policy had expired. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. c) Service revenue would be credited for $300. b) The adjusted trial balance contains only the accounts which were adjusted. c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. The Fish Aquarium obtained funds from a bank and owes interest on a note at the end of the month. 1. prepare an unadjusted trial balance c) They refer to earnings which have been earned but not yet billed. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. Unearned revenues refer to amounts owed to the company that have not yet been billed. Identify which group of accounts may require adjustments at the end of the accounting period. e) The debit and credit column totals must balance. Which of the following statements accurately explains how to enter adjustments? McDarrel's records $500 of accrued salaries on December 31. \text{Paid-in capital in excess of par value, common stock}&\text{200,000}\\ The trial balance at May 31 is as follows. Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. d) Unearned revenue would be debited for $300. A) The normal balance of accounts receivable is a debit. Service revenue would be credited for $200. Demonstrate the required adjusting entry by completing the following sentence. Answer: D Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Explain how to add adjustments to a work sheet when more than one adjustment is required: (Check all that apply.). Multiple choice question. (Check all that apply.). -Six months of rent were paid in advance. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. Adjustments involve increasing both an expense and a liability account. Not recording an accrued expense will have the following effect on the financial statements: (Check all that apply). c) December 31 In order to prepare a balance sheet using the account balances on an adjusted trial balance, all of the _____ (expenses/assets) and their debit balances are transferred to the balance sheet as well as all of the _____ (liabilities/revenues) and their ______ (debit/credit) balances. Which of the following is the proper adjusting entry? b) Utilities expense; Cash; Owner, Capital The P&L helps you compare your sales and expenses and make forecasts. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. (Check all that apply. a) Cash will be debited for $900. -A temporary account The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. below which are correct. e) Total assets will be increased. (The Unearned revenue account was increased at the time of the initial cash receipt.) Explain what unearned revenues are by selecting the statements below which are correct. They are also called deferred revenues. -Profit margin is a useful measure of a business's operating results. f) Accounts are generally listed in the same order as listed in the chart of accounts. The journal entry to record the payment of salaries on January 4 includes: Debit to Salaries Payable for $500; Debit to Salaries Expense for $2,000. They refer to revenues that are earned in a period, but have not been received and are unrecorded. 4. sort the adjusted trial balance amounts to the financial statements (Check all that apply. (Check all that apply.) Sharper declares and immediately distributes a 50% stock dividend. d) Profit margin is the ratio of a business's net income to its net sales. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. Enter the unadjusted trial balance. Insurance expense would be debited for $300. Demonstrate your understanding of adjusting for prepaid expenses by selecting the statement that is correct. 1) determine what the current account balance equals 2) determine what the current account balance should equal 3) record an adjusting entry Place the steps in the adjusting process in the correct order in which they would be performed. A link to the site is provided on the Web site for this textbook. -Accounts payable Which of the accounts below are considered accrued expenses? An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. 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. (Check all that apply. Unearned revenues refer to customer payments which have not yet been received. (Check all that apply.) It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. 800 of supplies were purchased at the beginning of the month and the Supplies account was increased. Closing means to transfer account balances from_______ accounts so that they will start with a ________ balance at the beginning of the next period. The following table shows the percent of obese Americans who are severely obese for selected years from 199019901990 and projected to 203020302030. d) accounts receivable being understated, a) revenue being understated (Check all that apply.) Select the statements below that describe the purpose of a post-closing trial balance. b) Any unused prepaids existing at end of period are transferred to asset accounts. b) Wages expense will be debited for $4,000. Unearned revenues refer to income reported on the income statement. The rationale behind this is that despite the company receiving payment from a customer, it still owes the delivery of a product or service. Select the statement below that describes a post-closing trial balance. They refer to cash received in advance of performing a service or product. Demonstrate the required journal entry on January 3 by selecting from the choices below. a) a list of accounts and balances before adjusting entries have been recorded and posted b) The balance sheet is the first financial statement prepared. Multiple select question. g) New accounts may need to be added because of the adjusting process. a) Debit accounts receivable and credit services revenue billed. At the end of the previous year, a customer owed Chocolates R US $500. After an adjusted trial balance is prepared, what is the next step in completing the work sheet used in preparing financial statements? b) Credit Interest expense for $30. $1,000 of cash was received in advance of performing services. Reason: The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? Check each other's answers when you are finished. E) The normal balance of the common stock account is a credit. -Permanent accounts will appear on a post-closing trial balance. If the company fails to deliver the promised product or service or a customer cancels the order, the company will owe the money paid by the customer. Explain the difference between the unadjusted and the adjusted trial balance. a) $75 On January 31 of the current year, the customer paid $900 total, which included the $500 owed plus $400 owed for the current month of January. A plant asset is the portion of a current asset which will be used up in the next accounting period. Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. prepare an unadjusted trail balance ), cash and other resources that are expected to be sold, collected or used within one year. g) Six months of rent were paid in advance. By the end, of the period, $300 had not yet been earned. credit -The adjustment can be squeezed in on one line of the trial balance. Explain what unearned revenues are by selecting the statements below which are correct. Explain what unearned revenues are by selecting the statements below which are correct.png 1 An advance payment of $1,000 for services was received on December 1.png 1 Review the following statements and determine which is (are) correct regarding an adjusted trial bal 1 View more Study on the go Download the iOS Download the Android app Correct Answer. 2. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. A temporary account will not appear on a post-closing trial balance. (The Unearned revenue account was increased at the time of the initial cash receipt.) a) credit services revenue (Check all that apply.). b) Accounts receivable will be credited for $400. Reason: Take a look at the P&L and then read a breakdown of it below. b) An adjusted trial balance is prepared after adjustments are posted, so new accounts may need to be added. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Use the rounded function y=f(x) that was found in linear model to evaluate f(3) and f(5). (Check all that apply.) a) Service revenue would be credited for $700. d) a one-month premium on an insurance policy was paid Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. c) A revenue account will be increased. d) The revenues on the income statement will be understated. It is increased with a debit and is considered an asset account. a 24-month insurance policy was prepaid -Most operating cycles are less than one year. Which of the accounts below are considered accrued expenses? They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Supplies on hand. Place the steps in the adjusting process in the correct order in which they would be performed. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. Sort adjusted trial balance amounts to the financial statement columns. is used to simplify record keeping Demonstrate the required adjusting journal entry by selecting from the choices below. Explain what unearned revenues are by choosing the correct statement below. Unearned revenues refer to cash received in advance of providing a service or product. the ______ rial balance is prepared by combining the adjustments in the Adjustments columns with the balances for each account listed on the _______ trial balance. b) Credit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 b) It reports amounts owed to employees and is a liability. d) Record receipt with a debit to the Rent revenue account. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. $1,000 of supplies were purchased at the beginning of the month. Below is an example of Amazon's consolidated statement of operations, or income statement, for the years ended December 31, 2015 - 2017. Which group of accounts receivable will be higher on the financial statements expenses. 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