-Entering the titles of all accounts and their account number. e) The debit and credit column totals must balance. a) Accounts receivable is usually increased when accruing revenues. They are a liability. Indicate whether each account would be reported in the (a) current asset; (b) property, plant, and equipment; (c) current liability; (d) long-term liability; or (e) owners equity section of the December 31, 2015, balance sheet of Kangaroo Consulting. a) liabilities on the balance sheet will be overstated. Adjustments involve increasing both an expense and a liability account. Amazon refers to its revenue as "sales," which is equally as common as a term. They are reported on an income statement. -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Answer: Unearned revenues refer to cash received in advance of providing a service or product. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. Unearned revenues refer to cash received in advance of providing a service or product. 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. ), Accrual basis accounting is defined as: (Check all that apply.). Question: Explain what unearned revenues are by selecting the statements below which are correct. Chimney Sweeps provided chimney cleaning services to several clients during the month of February. 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. b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. It is a more detailed alternative to the single-step income . Debit Depreciation expense; credit Accumulated depreci, Explain what unearned revenues are by selecting the statements below which are correct. (Check all that apply.). -Long-term investments are sometimes referred to as noncurrent investments. Use the rounded function y=f(x) that was found in linear model to evaluate f(3) and f(5). Therefore, the revenue must initially be recognized as a liability. -Accounts payable -Temporary accounts are reported on the income statement. b) The balance sheet is the first financial statement prepared. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. c) Service revenue would be credited for $200. They refer to earnings which have been earned, but not yet billed. Unearned revenue would be debited for $300. Examples of accrued expenses are wages expense and interest expense. Multiple select question. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. (Check all that apply.) Which of the accounts below are considered accrued expenses? The difference between income and revenues is self-explanatory. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Closing means to bring an account balance to zero. Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. When consumers have serious problems making payments and managing their debt, they may seek advice. (Check all that apply.). Which of the following accounts is considered a prepaid expense? -Accumulated depreciation is a contra account. (Check all that apply.). . Demonstrate the required journal entry on January 3 by selecting from the choices below. Michelle Walker started her own consulting firm, Walker Consulting, on May 1, 2020. A plant asset refers to the stock purchased by a business held for future investment. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. -Plant assets are equipment and other assets that have a life greater than one year. (The Supplies account was increased at the time of the initial purchase.) You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Blank 2: credit Multiple select question. However, the income represents the net of revenues and expenses. -Most operating cycles are less than one year. a 24-month insurance policy was prepaid On December 27, a business completed a $400 service that had not yet been billed or recorded as of December 31. d) Expenses are increased. interest receivable a) Unearned revenue, utility expense Oracle Corp reports information about pending lawsuits in the notes to . 2. journalize and post adjusting entries Determine which of the following transactions may require adjustments. Demonstrate the required adjusting journal entry by selecting from the choices below. 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 . Debit Interest payable for $30. Place the steps in the adjusting process in the correct order in which they would be performed. Six months of rent were paid in advance. c) debit interest expense and credit interest payable Reason: f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. b) credit accounts payable Which of the following describes accrued revenue? b) The adjusted trial balance contains only the accounts which were adjusted. A reversing entry: (Check all that apply). (Check all that apply. Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. a) December 1 The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. (Check all that apply.) Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. (Check all that apply.). -They are reported on an income statement. Not recording an accrued expense will have the following effect on the financial statements: (Check all that apply). An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Wages expense (Check all that apply.). Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. 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. below which are correct. b) Unearned revenues refer to cash received in advance of providing a service or product. HSPPF (Himalaya Shipping) Depreciation, Depletion and Amortization as of today (March 01, 2023) is $0.00 Mil. d) Profit margin is the ratio of a business's net income to its net sales. (Check all that apply.) a) It reports amounts owed to employees and is reported on the income statement. (Check all that apply), -An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Supplies would be debited for $300. Note that when the delivery of goods or services is complete, the revenue recognized previously as a liability is recorded as revenue (i.e., the unearned revenue is then earned). (Check all that apply.) They are reported on a balance sheet. It is estimated that it will have a life of 5 years and zero salvage value. d) January 1. Demonstrate the required adjusting entry by choosing the correct statement below. a) If a prepaid expense was initially recorded as an expense, then expenses will be higher on the income statement. -It is a tangible long-term asset. A company borrowed $4,000 from the bank at an interest rate of 9%. Multiple choice question. journalize b) Credit Interest expense for $30. Review the key term below. Multiple choice question. -the closing process helps to summarize a period's revenues and expenses. -An account that contains a credit for the sum of all revenues Long-term investments are sometimes referred to as noncurrent investments. -Six months of rent were paid in advance. Use a 360 day year. (Check all that apply.) Explain why unearned revenues are classified as liabilities instead of revenues. 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. Last modified on Wed 27 Apr 2022 18.53 EDT. Indicate each account affected, whether the account is increased of the amount of the increase or decrease. It is also known as deferred revenues Advertisement Previous Next Advertisement Demonstrate the required journal entry on January 3 by selecting from the choices below. Which of the statements below is correct regarding the difference between a temporary account and a permanent account? Problem-14: Adjustment of accounts. 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. It reports amounts owed to employees and is an asset. a. -Notes receivable due in 2 years b) Accounts receivable will be credited for $400. c) Debit Unearned revenues for $600. -Reduces the risk of errors when working with many accounts and adjustments, What are the benefits of using a work sheet? (Check all that apply. \end{array} 1. 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. -Businesses report financial information at regular intervals to ensure timeliness of data. (Check all that apply.) adjusting entry should include by choosing the. ), Which of the accounts below would be classified as long-term or fixed assets? Provide an example as well of an accrued revenue. Supplies were purchased at the beginning of the year, but not all were used. Which of the following accounts is considered a prepaid expense? 3. prepare an adjusted trial balance a) The first day of the period (Check all that apply. Let's take a closer look to understand how revenue works for a very large public company. Supplies would be credited for $300. Balance Sheet d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. (Check all that apply.). Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ or a(n). They are also called accounts receivable. Supplies would be debited for $200. The following Trial Balance was prepared on December 31, 2025. They refer to earnings which have been earned, but not yet billed. c) Salaries payable will be debited for $500. Unearned revenue would be debited for $700. (Check all that apply.). d) Profit margin is the ratio of a business's net income to its net sales. The revenues of a company are the net sales proceeds. Multiple choice question. depreciation expense Accounts payable Remember revenue is only recognized if a service or product is delivered, a refund nulls recognition. b) $100 Multiple choice question. e) a 24-month insurance policy was prepaid The compensation could be a cash payment or a . They are also called accounts receivable. Depreciation expense b. 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 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. Exchange your quiz with another student's quiz. b) remove the unearned amount to a liability account They refer to earnings which have been earned, but not yet (a) prepaid expense (b) unearned revenue (c) accrued revenue (d) accrued expense d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Cash will be debited for $600. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Dazzle expects to drive the car 60,000 miles during 2015, 65,000 miles during 2016, 40,000 miles in 2017, and 35,000 miles in 2018, for total expected miles of 200,000. Norfolk Southern Corp. reports revenue in its income statement when the performance obligation is satisfied instead of when cash is received. -Profit margin is a useful measure of a business's operating results. The closing process takes place at the ______ of an accounting period, after the ________ trial balance is prepared and ________ the financial statements are prepared. The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. a) The income statement is the first financial statement prepared after preparing the adjusted trial balance. Unearned revenues refer to customer payments which have not yet been received. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. Yahoo! 4. -The adjustment can be combined into one adjustment amount. c) expenses on the income statement will be understated. c) The unadjusted trial balance is more up to date and should be used to prepare financial statements. Demonstrate the required adjusting entry of the business by completing the following sentence. 46. Which of the following is the proper adjusting entry? c) Debit accounts receivable and credit cash, a) Debit accounts receivable and credit services revenue. The loan has been outstanding for 45 days. In the first step, you identified whether the deferred revenue is a current or long-term liability. Reason: Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. Credit Interest expense for $30. Which of the following refers to the preparation of an adjusted trial balance? b) Examples of accrued expenses are wages expense and interest expense. Demonstrate the required adjusting entry by completing the following sentence. In order to prepare the statement of owner's equity, the Owner _______ (Capital, Cash) account balance as well as any debit balance in the ______ (Withdrawals, Supplies) account is transferred from the adjusted trial balance and is used along with the reported net income (loss) from the Income statement. -Current liabilities are reported in the order of those to be settled first. Which of the accounts below are considered accrued expenses? Supplies expense would be debited for $600. b) Credit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Define the Salaries payable account by selecting the appropriate statement below. The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. Riverbed Company Worksheet For the Month Ended June 30, 2019 Trial Balance Account Titles Dr. Cr. They refer to cash received in advance of. -They are reported on a balance sheet. -An account whose balance equals net income or net loss We reviewed their content and use your feedback to keep the quality high. d) Debit Prepaid insurance for $400. -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. A prepaid expense (such as supplies or prepaid rent) can initially be recorded as either an expense or as an asset. should be recorded when goods or services are provided to customers at an amount expected to be received. Unearned revenue would be debited for $700. d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. b) The adjustment causes an increase in an asset account and an increase in a revenue account. Live Tutoring. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus, Fundamentals of Financial Management, Concise Edition, Unit 3 | Standard 3 | Basic Organization and, Social Studies Chapter 19 Study Guide - Mill. (Check all that apply.) The Fish Aquarium obtained funds from a bank and owes interest on a note at the end of the month. (The Unearned revenue account was increased at the time of the initial cash receipt.) a) Debit Catering revenue for $600. By the end of the year, $400 had been earned. c) December 31 Learn to analyze an income statement in CFI's Financial Analysis Fundamentals Course. (Check all that apply.). c. Book value. The Income Summary account is used during the closing process to facilitate the closing of revenue and expense accounts. a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. Accumulated depreciation is a contra account. Structured Query Language (known as SQL) is a programming language used to interact with a database. Excel Fundamentals - Formulas for Finance, Certified Banking & Credit Analyst (CBCA), Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM), Commercial Real Estate Finance Specialization, Environmental, Social & Governance Specialization, CFIs Advanced Financial Modeling & Valuation Course, Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM). Closing means to bring an account balance on the income statement in CFI & # ;. Making payments and managing their debt, they may seek advice basis accounting is defined as: ( all. Alternative method of accounting for prepayments and purchased a $ 1,200, 6-month insurance policy was prepaid compensation! One adjustment amount -long-term investments are sometimes referred to as noncurrent investments modified on Wed 27 Apr 2022 EDT... 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explain what unearned revenues are by selecting the statements below