(Check all that apply.). Answer: Unearned revenues refer to cash received in advance of providing a service or product. ( ) A plant asset refers to a long-term tangible asset used to produce and sell products or services. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Unearned revenue is money received by an individual or company for a service or product that has yet to be fulfilled. Which of the following accounts is considered a prepaid expense? -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. Use this function. b) They refer to cash received in advance of performing a service or product. a) It reports amounts owed to employees and is reported on the income statement. Accrual basis accounting recognizes (equity/revenues/expenses) when earned and records (revenues/expenses/liabilities) when (incurred/paid) in order to adhere to the matching principle. Record the closing entries on Page 27 of the journal. List of Excel Shortcuts Demonstrate. By the end of the accounting period, the loan had been outstanding for 30 days. They are also called accounts receivable. b) Debit Interest receivable for $600. a) An adjusted trial balance is prepared after adjustments have been posted. (The unearned revenue account was increased at the time of the initial cash receipt.) c) December 31 b) credit accounts payable b) Credit Interest expense for $30. Describe the final step in the adjusting process. f) The ending Owner, Capital account balance on the balance sheet is taken directly from the adjusted trial balance. In some cases, bankruptcy may be the only course available. The company immediately debited the Insurance expense account. Multiple choice question. a) a list of accounts and balances before adjusting entries have been recorded and posted a) Debit Catering revenue for $600. Sort adjusted trial balance amounts to the financial statement columns. -Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase. The required adjusting journal entry will b) Credit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 b) The adjusted balance is computed by taking that account's amount from the Unadjusted Trial Balance column and adding or subtracting adjustments. -Intangible assets are long-term resources that benefit business operations, but lack physical form. They are reported on a balance sheet. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Norfolk Southern Corp. reports revenue in its income statement when the performance obligation is satisfied instead of when cash is received. Notes receivable and stock and bond investments are assets that are expected to be held for more than one year. The next step is to insert adjustment diary entries. d) debit accounts receivable The company records prepaid and unearned items in balance sheet accounts. service revenue, What is the date primarily used in adjusting entries? Salaries payable will be debited for $500. accounts receivable c) Cash; Notes receivable; Land, a) Unearned revenue; Supplies; Prepaid rent. 800 of supplies were purchased at the beginning of the month and the Supplies account was increased. Trustee Program Web site. c) debit interest expense and credit interest payable Smartbook: Chapter 4 Completing the Accountin, Quiz 5 Biology what we have covered so far, Commonstock-$10parvalue,50,000sharesissuedandoutstanding, Paid-incapitalinexcessofparvalue,commonstock, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. depreciation expense ), -Land held for future expansion Salaries expense would be debited for $3,500. -Six months of rent were paid in advance. Property, Plant and Equipment explanation, calcul a) credit services revenue should be recorded when goods or services are provided to customers at an amount expected to be received. They are a liability. The line items of the income statement provide details of revenues, expenses, gains, and losses in a bid to explain how a company earned its net income. Unearned revenues refer to customer payments which have not yet been received. (Check all that apply.) -Accounts payable The formula to figure out the profit margin of a company is ______ (Net income/Accounts receivable/Net sales) divided by _______ (Net income/Cash/Net sales). -Temporary accounts have a balance for one period only. E) The normal balance of the common stock account is a credit. A reversing entry: (Check all that apply). A temporary account will not appear on a post-closing trial balance. TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. -A temporary account is closed at the end of an accounting period. c) The unadjusted trial balance is more up to date and should be used to prepare financial statements. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. a) Each adjustment is identified by a letter in parentheses that serves as a cross-reference to the debit and credit side of the adjustment. Which of the accounts below are considered accrued expenses? Which of the following accounts would be considered a prepaid expense or prepaid asset account? Last modified on Wed 27 Apr 2022 18.53 EDT. 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)? For the current year, Bubbles Office Supply had earned $600 of interest on investments. 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 . (Check all that apply.). On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. -Notes payable (due in three months) -They are a liability. (Check all that apply.). The income statement is the first financial statement prepared after preparing the adjusted trial balance. d) Cash would be credited for $4,000. Which of the following statements describes the expense recognition (matching) principle? A revenue not yet recognized; collected in advance. a) Record all prepaid expenses with credits to liability accounts. d) liabilities on the balance sheet will be understated. -Notes receivable and stock and bond investments are assets that are expected to be held for more than one year. Salaries expense would be debited for $3,500. Payment received, but Good or Service still hasn't been delivered. a) December 1 to February 1 McDarrel's records $500 of accrued salaries on December 31. Question: Explain what unearned revenues are by selecting the statements below which are correct. A company borrowed $4,000 from the bank at an interest rate of 9%. This principle is a major part of the (timing/adjusting/estimating) process. For the current year, a business has earned (but not recorded or received) $200 of interest from investments. collected in advance prior a service or the product is to be delivered. d) Unearned revenues refer to amounts owed to the company that have not yet been billed. a) Cash will be debited for $600. Explain what unearned revenues are by choosing the correct statement below. (Check all that apply.). a) Record the receipt of $400 with a debit to the Unearned rent account. Reason: b) Accounts receivable will be credited for $400. Revenue and expense information is taken from the adjusted trial balance as . Which statements below are true regarding permanent and temporary accounts? On January 4 of the current year, total salaries for the five-day week are paid. b) debit interest payable and credit cash Examples of accrued expenses are wages expense and interest expense. Equipment Oracle Corp reports information about pending lawsuits in the notes to . d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. -The value of intangible assets comes from the privileges or rights granted to or held by the owner. (Check all that apply. Adjustments involve increasing both an expense and a liability account. Learn to analyze an income statement in CFI's Financial Analysis Fundamentals Course. -An account used during the closing process, The Income Summary account can be defined as which of the following? Accrual basis accounting recognizes __________ when earned and records __________ when _________ in order to adhere to the matching principle. (Check all that apply.) -They are reported on an income statement. Demonstrate the required adjusting entry by choosing the correct statement below. a) Credit Interest receivable for $600. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. -The adjusted trial balance includes all accounts and balances appearing in financial statements. Some examples of unearned revenue include advance rent payments, annual subscriptions for a software license, and prepaid insurance. Which of the following is the correct adjusting entry? b) Debit Unearned revenue for $600. Balance Sheet C. Prepaid expenses are expenses paid and already incurred. The problem stated that you were to use a 360 day year. f) Accounts are generally listed in the same order as listed in the chart of accounts. These services have not yet been paid by the customers. D. Accrued expenses are expenses already incurred but not yet paid. -It has a life within the business greater than one year. High Quality & Low Capex. Identify which group of accounts may require adjustments at the end of the accounting period. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. As of December 31, none of this interest had been received or recorded. 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. Below is an example of Amazon's consolidated statement of operations, or income statement, for the years ended December 31, 2015 - 2017. By the end of the period, $300 had not yet been earned. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. b) $100 (Check all that apply. Multiple choice question. d) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. \text{Paid-in capital in excess of par value, common stock}&\text{200,000}\\ Calculate the first month's depreciation expense as of December 31 using the straight-line method. Current items can be described as those expected to come due within one _________ and are listed in the order of how _______ they could be converted to or paid in cash. ), Which of the accounts below are considered accrued expenses? Recently, he discovered Amazon Prime services. High Yield Insider Buys (Check all that apply.) $1,000 of cash was received in advance of performing services. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. (The Unearned revenue account was increased at the time of the initial cash receipt.) Which of the following statements correctly define(s) a profit margin? They refer to costs that are incurred in a period, but are both unpaid and Use a 360 day year. If accounts are adjusted at the end of each month, the relevant journal entries are given below: Entry on January 01 when advance payment is received: Adjusting entry on January 31 to convert a portion of unearned revenue (a liability) to earned revenue: (3). Demonstrate the required adjusting journal entry by selecting from the choices below. b) $100 By the end of the period, $300 had not yet been earned. (Check all that apply.). Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. By the end of the accounting period, the loan had been outstanding for 30 days. They are also called accounts receivable. a) Debit Prepaid insurance $800. ), Machinery a) revenue being understated b) Utilities expense; Cash; Owner, Capital b) Supplies were purchased at the beginning of the year, but not all were used. Salaries payable will be credited for $500. -Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. Unearned revenues refer to cash received in advance of providing a service or product. (Check all that apply.). (Check all that apply.) List the order in which financial statements are prepared. Cash flow statement. c) Salaries payable will be debited for $500. By the end of the accounting period, employees have earned salaries of $650, but they will not be paid until the following pay period. b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. They refer to revenues that are earned in a period, but have not been received and are unrecorded. Income statement Click the answer you think is right Unearned revenues refer to amounts owed to the company that have not yet been billed. What is a plant asset? 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. Explain the difference between the unadjusted and the adjusted trial balance. 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. The required adjusting entry would be to debit the Salaries _____expense/payable) account and____debit/credit) the Salaries ____expense/payable/unearned) account. (Check all that apply.). They refer to cash received in advance of performing a service or product. -An account whose balance equals net income or net loss Debit Unearned revenues for $400. -Supplies were purchased at the beginning of the year, but not all were used. 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. Explain what unearned revenues are by selecting the statements below which are correct. C) The normal balance of unearned revenues is a credit. 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. A revenue not yet recognized, collected in advanc; Generally accepted accounting principles require the use of accruals and deferrals in the determination of income. Supplies expense would be debited for $200. b) An adjusted trial balance has one debit column and one credit column. Illustrate your understanding of how to use the adjusted trial balance to prepare an income statement by completing the following sentence. Unearned revenues refer to amounts owed to the company that have not yet been billed. c) Service revenue would be credited for $200. Michelle Walker started her own consulting firm, Walker Consulting, on May 1, 2020. Unearned revenue, Utility expense A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. (Check all that apply) Assume that Microsoft recognized $2000 million of unearned revenue as revenue during the year, what entry for unearned revenue did Microsoft make during the year? b) accounts receivable being overstated. 2. a. Below is an example of Amazon's 2017 income statement. All adjustments can easily be seen in the _______ trial balance columns and then an ________ trial balance can be prepared. Let's take a closer look to understand how revenue works for a very large public company. (Check all that apply.) What would be the journal entry on January 31 that reflects this? Reason: Reason: Unearned revenues refer to customer payments which have been received in advance of providing the service or product. 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 -They are reported on a balance sheet. They refer to cash received in advance of performing a service or product. The expense recognition (matching) principle aims to record ________ in the same accounting period as the ________ that are earned as a result of those costs. Demonstrate the required adjusting entry for this company by completing the following sentence. A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? c) Profit margin is a useful measure of a business's operating results. e) Unearned revenue would be debited for $700. Unearned revenues refer to income reported on the income statement O Unearned revenues This problem has been solved! a) Cash will be debited for $900. Depreciation, Depletion and Amortization explanat However, in some cases, when the delivery of the goods or services may take more than a year, the respective unearned revenue may be recognized as a long-term liability. Which of the, An advance payment of $1,000 for services was received on December 1 and. 4. prepare financial statement. apply.) Initially, the full amount will be recognized as unearned revenue on Amazons balance sheet. Yahoo! Randall's Service Company Trial Balance December 31, 2025 Debit Account Title Cash Accounts Receivable Prepaid Rent Office Supplies Land Building Equipment Accounts Payable Unearned Revenue Notes . (Check all that apply.) Debit unearned revenues for $ At the end of the previous year, a customer owed Chocolates R US $500. -Retained Earnings is a permanent account, but Dividends is a temporary account. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Cash would be credited for $4,000. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. ), Which of the accounts below would be classified as long-term or fixed assets? -The length of a company's operating cycle depends on its activities. A prepaid expense (such as supplies or prepaid rent) can initially be recorded as either an expense or as an asset. -The adjustment can be combined into one adjustment amount. Accounts receivable is usually increased when accruing revenues. e) debit services revenue, a) credit services revenue Transcribed Image Text: Explain what uneared revenues are by choosing the correct statement below. Explain the difference between the unadjusted and the adjusted trial balance. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). They refer to earnings which have been earned, but not yet -the closing process resets the balances in temporary accounts to zero. (Check all that apply.). a) Debit accounts receivable and credit services revenue Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. In order to prepare an income statement using the account balances on an adjusted trial balance, all of the ______ (revenues/liabilities) and their credit balances are transferred to the income statement as well as all of the ______ (expenses/assets) and their ______ (debit/credit) balances. ___ 2. (Check all that Multiple select question. Which of the statements below explains the accounting cycle? b) Service revenue would be credited for $700. Utility expense. Describe the final step in the adjusting process. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. A) The normal balance of accounts receivable is a debit. (Check all that apply.). $1,000 of supplies were purchased at the beginning of the month. Demonstrate the required adjusting entry by completing the following sentence. Able Company owes interest on a note for a loan. Supplies expense would be debited for $700. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. (Check all that apply.) -Profit margin is the ratio of a business's net income to its net sales. The chart of accounts used by Norton Printing Company is listed below. (Check all that apply.) d) liabilities on the balance sheet will be understated. 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. (Check all that apply.). (Check all that apply). a) The first day of the period What defines a long-term investment? $300 were used during the month. Calculate the amount of interest to accrue if the loan has been outstanding for 90 days. (Check all that apply.). Enter the unadjusted trial balance. Solution for For journal entries 1 through 10, identify the explanation that mostly closely describes it. c) Credit to Salaries Payable for $500; Debit to Salaries Expense for $2,000 HSPPF (Himalaya Shipping) Depreciation, Depletion and Amortization as of today (March 01, 2023) is $0.00 Mil. Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. Hub. credit c) It is increased with a debit and is considered an asset account. -It is a tangible long-term asset. The compensation could be a cash payment or a . Adjustments involve increasing both an expense and a liability account. (Check all that apply.). 1. (Check all that apply.). -A temporary account has a balance for only one period. c) A liability (such as salaries payable) will be increased. The note is dated December 1 and is due on February 1. -Most companies use a one-year period or operating cycle in deciding which assets and liabilities are current. Demonstrate the required adjustment needed at the end of the period. A Copper cable B Fiber Optics C Satellite Radio Link D Radio System Correct, In this assay both the triple mutant Ser 221 Ala Ser 255 Ala and Ser 408 Ala and, (Answers)Assessment 2_ Project 1 - Develop work plans and allocate work.docx, Clearly give your answers in the spaces provided DO NOT WRITE ANYTHING ON THE, Assuming free entry these above average profits will attract other firms to, Fig 1528 Flexion is concealed by damage to the cartilages leading to limitation, generated less additional corn than the previous bag We just entered the range, condenses large numbers of questions into a smaller more manageable set of, Chapter 13 Chapter 14 Stella comes to the courthouse shaken up and goes off by, QUESTION 24 Which MTU size can cause a baby giant error A 1500 B 9216 C 1600 D, Data Modeling and Management Given a scenario determine the appropriate data, AUSTIN HENSLEY - DNA & DNA Replication Webquest.docx. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. ), Which of the following describe the salaries payable account? Reason: Check each other's answers when you are finished. 4. Multiple choice question. The accounting cycle is repeated each reporting period and refers to the steps taken in preparing financial statements. The closing process takes place at the ______ of an accounting period, after the ________ trial balance is prepared and ________ the financial statements are prepared. Thank you for reading CFIs guide to Unearned Revenue. On December 28, I. M. Greasy, Catering completed $600 of catering services. By the end of the accounting period, employees have earned salaries of $650, but they will not be paid until the following pay period. Demonstrate your knowledge of preparing an adjusted trial balance by selecting the correct statement below. Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. (Check all that apply.). Accumulated depreciation. Insurance expense would be debited for $300. Service revenue would be credited for $700. -Examples of accrued expenses are wages expense and interest expense. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Review the statements below and select the items that are correct regarding the operating cycle for a business. Image from Amazon Balance Sheet. It is estimated that it will have a life of 5 years and zero salvage value. Accounting for a refund differs from a reversal. c) Profit margin is a useful measure of a business's operating results. Which of the following statements are true regarding depreciation? Explain what unearned revenues are by choosing the correct statement below. McDarrel's records $500 of accrued salaries on December 31. A. An income statement shows the organization's financial performance for a given period of time. They refer to earnings which have been earned but not yet billed. Which of the accounts below are considered accrued expenses? b) The adjustment causes an increase in an asset account and an increase in a revenue account. And bond investments are assets that are incurred in a revenue account was increased for current. Your knowledge of preparing an adjusted trial balance by selecting the statements below which are.! On its activities sell products or services the business greater than one year Check all that apply ) is insert. May post these revenues in an asset account recognized ; collected in advance of performing a service or.... Is received explain your understanding of how to use the adjusted trial balance performance for a given period of.... 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Yet billed salaries for the payment stock account is closed at the beginning of the month is December... Explain the difference between the unadjusted and the adjusted trial balance Oracle Corp reports information about pending lawsuits the! Either an expense and interest expense 31 that reflects this on may 1 2020... Depreciation expense ), which of the ( timing/adjusting/estimating ) process are true regarding timeliness the! Be prepared and should be used to produce and sell products or.... Credit accounts payable b ) the adjusted trial balance to prepare an statement... Months ) -They are a liability payment received, but not yet -the closing process, the seller post. Cycle in deciding which assets and liabilities are current paid and already incurred but not -the. Of the following sentence liabilities on the income statement shows the organization & # ;... Purchased on Dec. 1 for $ 600 what would be debited for 700... End of an accounting period be to debit the salaries _____expense/payable ) account and____debit/credit ) the _____expense/payable! Receivable ; Land, a customer owed Chocolates R US $ 500 income earned and already.... Income earned and already collected a liability ( such as salaries payable ) will be recognized as unearned revenue was... Dated December 1 and was recorded as a liability account 500 for one day of accrued expenses step to. Calculate the amount of interest to accrue if the loan has been solved adjustments involve increasing an. All adjustments can easily be seen in the plant asset account and an increase in a period, are... Business greater than one year selecting the correct statement below Chocolates R US $ of!