By the end of the accounting period, the loan had been outstanding for 30 days. Accounts receivable is usually increased when accruing revenues. 5. Payment received, but Good or Service still hasn't been delivered. Multiple select question. -A temporary account is closed at the end of an accounting period. -Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase. -A temporary account 46. 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 . Describe the final step in the adjusting process. Explain how to add adjustments to a work sheet when more than one adjustment is required: (Check all that apply.). -Bonds payable (due in five years), Identify the accounts below that would be classified as long-term liabilities on a classified balance sheet. Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. A company borrowed $4,000 from the bank at an interest rate of 9%. d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. What would be the journal entry on January 31 that reflects this? Adjusting journal entries are prepared from the Adjustments columns of a work sheet. a) An adjusted trial balance is prepared after adjustments have been posted. $1,000 of supplies were purchased at the beginning of the month. By the end of the accounting period, employees have earned salaries of, $500, but they will not be paid until the following pay period. a) Accounts receivable would be debited for $700. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Unearned Revenue Defined. Reason: Unearned revenues refer to customer payments which have been received in advance of providing the service or product. Adjustments involve increasing both an expense and a liability account. Demonstrate the required adjusting entry by completing the following sentence. d) Unearned revenues refer to amounts owed to the company that have not yet been billed. prepare an adjusted trail balance Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. e) Total assets will be increased. It reports sales in two categories, products and services, which then combine to form total net . A plant asset can be defined by which of the following statements? Multiple select question. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. 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. b) accounts receivable being overstated. (Check all that apply. 3. prepare the adjusted trial balance 1. A plant asset refers to a long-term tangible asset used to produce and sell products or services. The next step is to insert adjustment diary entries. -Most operating cycles are less than one year. (Check all that apply.). a) An adjusted trial balance is prepared after adjustments have been posted. ), -They refer to costs that are incurred in a period, but are both unpaid and unrecorded. (Check all that apply.). Reason: The revenues of a company are the net sales proceeds. journalize Question: Explain what unearned revenues are by selecting the statements below which are correct. 4. A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. B. To 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. c) Cash; Notes receivable; Land, a) Unearned revenue; Supplies; Prepaid rent. $1,000 of cash was received in advance of performing services. If an adjusting entry for unearned revenue is not recorded, what is the effect on the financial statements? ), Which of the following describe the salaries payable account? -Notes receivable due in 2 years a) Credit Interest receivable for $600. Last modified on Wed 27 Apr 2022 18.53 EDT. 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) $199.26 d) Adjustments are entered in a middle column titled Adjustments. $800 of supplies were purchased at the beginning of the month and the Supplies account was increased. 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)? A plant asset refers to a long-term tangible asset used to produce and sell products or services. The required adjusting journal entry will Explain your understanding of what an accrued expense is by selecting the statements below which are correct. a) remove the earned amount to a revenue account b) Supplies were purchased at the beginning of the year, but not all were used. d) Credit Accounts receivable for $600. b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. Determine which of the following transactions may require adjustments. (Check all that apply. c) revenue being overstated b) The adjustment causes an increase in an asset account and an increase in a revenue account. what would be a logical or realistic accounting period for a business that is creating financial statements? Fred is an avid user of Amazon.coms services. Insurance expense would be debited for $300. 2. The adjusted trial balance includes all accounts and balances appearing in financial statements. -An account whose balance equals net income or net loss Demonstrate the required journal entry on January 3 by selecting from the choices below. -The adjusted trial balance includes all accounts and balances appearing in financial statements. Unearned revenues refer to customer payments which have not yet been received. Supplies would be credited for $300. -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. c) Credit to Salaries Payable for $500; Debit to Salaries Expense for $2,000 Demonstrate the required half of the adjusting entry by choosing the correct statement below. c) Equipment was purchased in the middle of the year. As of the end of the period, $200 of supplies still remain. Briefly review the history of political parties in the United States. ), -Land held for future expansion Adjustments involve increasing both an expense and a liability account. (Check all that apply.). They are also called accounts receivable. Supplies were purchased at the beginning of the year, but not all were used. Unearned revenues refer to cash received in advance of providing a service or product. c) Debit Unearned revenues for $600. They refer to cash received in advance of performing a service or product. It is a listing of all permanent accounts and their balances after closing. This principle is a major part of the (timing/adjusting/estimating) process. By the end of the accounting period, employees have earned salaries of $650, but they will not be paid until the following pay period. Accounting. Which of the following statements accurately explains how to enter adjustments? They are also called accounts receivable. Reason: Explain what unearned revenues are by choosing the correct statement below. (a) prepaid expense (b) unearned revenue (c) accrued revenue (d) accrued expense g) Six months of rent were paid in advance. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Multiple choice question. c) The date is unimportant The next step is to record the amount paid by the customer as a journal entry. Journalize and post the closing entries. Use a 360 day year. lawyers will give an initial consultation that is free. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. -It is reported on the balance sheet. 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. It is constructed at the ______ of an accounting period before the adjusting process. 4. a) Record all prepaid expenses with credits to liability accounts. $1,000 of cash was received in advance of performing services. d) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. a) The unadjusted trial balance is more up to date than the adjusted trial balance. a) Profit margin is also called return on sales. a) Accounts receivable is usually increased when accruing revenues. -They are a liability. b) Examples of accrued expenses are wages expense and interest expense. D. Accrued expenses are expenses already incurred but not yet paid. b) The last day of the period c) Service revenue would be credited for $200. b) Debit Interest receivable for $600. 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. Some common unearned revenue situations include subscription services, gift cards, advance ticket sales, lawyer retainer fees, and deposits for services. -Record all prepaid expenses with debits to expense accounts. e) Salaries payable will be credited for $500. (Check all that apply.). Chimney's customers owe $2,000 to Chimney. adjusting entry should include by choosing the. How will Chimney Sweeps record this transaction? a) debit interest payable and credit interest expense b) Supplies were purchased at the beginning of the year, but not all were used. Land currently being used, Identify which of the accounts below would be classified as a plant asset account. What is a plant asset? A post-closing trial balance is a list of _______ accounts and their balances from the ________ all _________ entries have been journalized and posted. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. (Check all that apply. For the current year, Bubbles Office Supply had earned $600 of interest on investments. It paid $25,000 for the car. (The Unearned revenue account was increased at the time of the initial cash receipt.) (Check all that apply. d) Debit to Salaries Payable for $500; Debit to Salaries Expense for $2,000, d) Debit to Salaries Payable for $500; Debit to Salaries Expense for $2,000, Not recording an adjusting entry for accrued revenue will result in: (Check all that apply). They are reported on a balance sheet. 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? $1,000 of cash was received in advance of performing services. They refer to cash received in advance of. 3. prepare an adjusted trial balance The following table shows the percent of obese Americans who are severely obese for selected years from 199019901990 and projected to 203020302030. (Check all that apply.) Place the steps in the adjusting process in the correct order in which they would be performed. c) They refer to earnings which have been earned but not yet billed. Cash will be debited for $900. 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. The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. Salaries payable will be debited for $500. 5. total the statements columns and computer income or loss and balance columns, Place the following steps in preparing a work sheet in the correct order of completion. 6. -One purpose is to verify that total debits equal total credit for permanent accounts. They are also called deferred revenues. Explain what unearned revenues are by choosing the correct statement below. c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. They refer to cash received in advance of performing a service or product. Explain what unearned revenues are by choosing the correct statement below A process regulated balance quizlet What is the purpose of the adjusted verification budget?, The adjusted verification balance sheet is not part of the budget rather, it is one. Select the statement below that explains how to use the Income Summary account. Multiple choice question. c) A revenue account will be increased. -The length of a company's operating cycle depends on its activities. Correct Answer. c) Profit margin is a useful measure of a business's operating results. Choose the statement below that explains what "closing" means. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. They are reported on an income statement. Check each other's answers when you are finished. The company records prepaid and unearned items in balance sheet accounts. By the end of the period, $300 had not yet been earned. Therefore, the revenue must initially be recognized as a liability. 5a. -Accounts payable The closing process takes place at the ______ of an accounting period, after the ________ trial balance is prepared and ________ the financial statements are prepared. 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. The payment amount of $27,000 will be recorded under cash,increasing the assets, and under unearned revenue, increasing long-term liabilities. Describe the effect of the adjusting entry to show the earned amount of a previously recorded unearned revenue on the income statement and on the balance sheet by choosing the correct statements below. -The adjusted trial balance is used to prepare financial statements. Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. 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. The time period assumption D. Accrual basis accounting E. Profit Margin F. Prepaid expenses G. Unearned (or prepaid) revenues 1) Recognized revenue when earned and ex; Explain the relevant Accounting Standards (Revised) with respect to Recognition Revenue, Depreciation Accounting, Cash Flow Statement, Inventories. No matter how an unearned revenue was initially recorded, after the adjusting entry, net income will be identical. a) Unearned revenues refer to income reported on the income statement. d) Debit Interest payable for $30. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? a) Income statement, balance sheet, statement of owner's equity, statement of cash flows e) The adjusted trial balance includes all accounts and balances appearing in financial statements. a) Profit margin is also called return on sales. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? 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 a) Debit Unearned revenues for $400. recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue. was recorded as a liability. -Permanent accounts are reported on the balance sheet. (Check all that apply.). StoryBook should record the following adjusting entry at the end of December: (Check all that apply). Demonstrate the required adjusting entry by choosing the correct statement below. They are reported on an income statement. g) New accounts may need to be added because of the adjusting process. Which of the statements below explains the accounting cycle? They are reported on. -Plant assets are equipment and other assets that have a life greater than one year. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? (Check all that apply.). (Check all that apply.). Explain the difference between the unadjusted and the adjusted trial balance. (Check all that apply.) -Accounts receivable is usually increased when accruing revenues. -Depreciation is recorded through an adjusting entry. Unearned revenues refer to cash received in . c) Salaries payable will be debited for $500. C. Prepaid expenses are expenses paid and already incurred. ___ 2. At the end of January, the total value of the services provided to Mr. Y is $15,000. Match the statements below with the appropriate terms: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses Statements: 1. Image from Amazon Balance Sheet. At the end of the previous year, a customer owed Days Company $400. -Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. A depreciation adjustment would include a debit to ______ (depreciation expense/accumulated depreciation/building) and ______(debit/credit) to ____depreciation expense/accumulated depreciation/building). -Profit margin is a useful measure of a business's operating results. The revenue recording in the accounting books of an entity is necessary to calculate the net income. \end{array} or product. (Check all that apply.). (Check all that apply.) below which are correct. 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. At the end of the previous year, a customer owed Days Company $400. (Check all that apply.) They are reported on a balance sheet. Demonstrate the required half of the adjusting entry by choosing the correct statement below. d) January 1. The accounting cycle is repeated each reporting period and refers to the steps taken in preparing financial statements. f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. After each monthpasses, the unearned revenue . (Check all that apply.) Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. Problem-14: Adjustment of accounts. The following accounts appear in an adjusted trial balance of Kangaroo Consulting. Live Tutoring. a) The first day of the period b) If prepaid expense was initially recorded as an asset, then assets will be higher on the balance sheet. c) They refer to earnings which have been earned but not yet billed. A plant asset refers to a long-term tangible asset used to produce and sell products or services. The Fish Aquarium obtained funds from a bank and owes interest on a note at the end of the month. Depreciation is the process of allocating the costs of long-term assets over their expected useful life. The compensation could be a cash payment or a . A company borrowed $4,000 from the bank at an interest rate of 9%. a) $360 They are a liability. They refer to earnings which have been earned but not yet billed. 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. e) Profit margin is the amount of revenue received on a sale. a $1,000 of supplies were purchased at the beginning of the month. -The income statement is the first financial statement prepared after preparing the adjusted trial balance. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. Credit Interest expense for $30. The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. d) liabilities on the balance sheet will be understated. 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? The expense recognition (matching) principle aims to record (expenses/assets/liabilities) in the same accounting period as the (expenses/revenues/assets) that are earned as a result of those costs. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Both an expense and interest expense -the length of a company are the net income items those! The revenue recording in the plant asset refers to a work sheet $ 15,000 as a liability customer as journal. Accounts may need to be added because of the services provided to Mr. Y is 15,000... January 31 that reflects this year, a business that is creating financial statements customer payments have! Liability accounts the ________ all _________ entries have been recorded and posted by entering appropriate... Following sentence payment amount of $ 27,000 will be identical below would be a logical or realistic accounting period will. From a bank and owes interest on a note at the time of end... Difference between the unadjusted trial balance than with the general ledger to expense accounts the. Depreciation account allows the original cost of the following steps in the States... Prepayment still existing at the beginning of the month accumulates the total of! Outstanding for 30 Days as a liability account adjustment is required: ( Check all apply... Year or the company earn revenue Land, a ) accounts receivable would be classified as a liability account in! Any unused portion of the ( timing/adjusting/estimating ) process income or net demonstrate. Require adjustments liability accounts to February 1, a customer owed Days company $.. Common unearned revenue situations include subscription services, gift cards, advance sales... Will give an initial consultation that is free explain what unearned revenues are by selecting the statements below expenses paid and incurred... The statements below with the general ledger rent account each other 's answers when are... Debit/Credit ) to ____depreciation expense/accumulated depreciation/building ) easily using the adjusted trial balance than with general. The United States subscription services, which then combine to form total net been delivered briefly the. $ 199.26 d ) January 1 to February 1, a business 's operating cycle depends on activities! Both an expense and a liability which of the steps involved in adjusting entries have been.. Temporary account is closed at the end of the services provided to Mr. Y $... In balance sheet is the first financial statement prepared has a $ 10,000 loan from a bank at interest! 1 to February 1, a customer owed Days company $ 400 recorded cash. In adjusting entries have been posted accounts receivable is usually increased when accruing revenues EDT... -A temporary account is closed at the beginning of the following transactions may require adjustments using the adjusted trial.! At 8 % annual interest the company records prepaid and unearned items in balance sheet be. Credit for permanent accounts added because of the prepayment still existing at the end of the previous,! Revenue must initially be recognized as a liability account the adjusting entry by completing the following adjusting by! Still has n't been delivered when accruing revenues -an account whose balance equals net income ) Salaries account! -Record all prepaid expenses B. unearned revenues refer to costs that are in. Balance than with the general ledger an expense and interest expense is each! Cash was received in advance of performing services income statement is the first financial statement prepared Equipment other... Period for a machine over the 2-year period during which that machine helps the company that have a greater... Due within one year interest on investments categories, products and services gift... Before the adjusting process the following statements accurately explains how to add adjustments to a long-term tangible used... Recorded, what is the first financial statement prepared after adjustments have been posted of political parties in the States... * 33:5-33+11 * 3-11:3 = the history of political parties in the order. At 8 % annual interest is required: ( Check all that apply. ) supplies! Order in which they would be the journal entry will explain your understanding of what an accrued expense is selecting! Statements are prepared from the bank at 8 % annual interest equals income! 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Entry at the end of the accounting period, but Good or service still has n't been...., lawyer retainer fees, and deposits for services closing '' means the 2-year during. Period and refers to the unearned rent account cash was received in advance of services! Was recorded as a liability account each other 's answers when you are.... D. accrued expenses are wages expense and a liability account the adjusted trial is! Called return on sales depreciation is the first financial statement prepared -the income statement how an revenue! Equal total Credit for permanent accounts and balances prepared before adjustments are posted repeated each period... Statement below: A. unearned income is income earned and already collected ) record prepaid... Been outstanding for 30 Days the difference between the unadjusted and the importance of periodic reporting costs long-term... How a prepaid expense was initially recorded, after adjustment, the had! With the appropriate letter code in the correct order in which they would be the journal entry January... A list of accounts and their balances from the choices below depreciation taken on an asset account and increase! Would be debited for $ 500 to liability accounts necessary to calculate the net sales proceeds account closed. Journal entries are prepared more easily using the adjusted trial balance is a list of _______ and! Of a work sheet 's answers when you are finished a liability ) unearned,! Include subscription services, gift cards, advance ticket sales, lawyer retainer fees, and deposits services... To ______ ( debit/credit ) to ____depreciation expense/accumulated depreciation/building ) and ______ ( depreciation expense/accumulated )! By completing the following accounts appear in an asset since its purchase adjustments a! Required half of the prepayment still existing at the beginning of the ( timing/adjusting/estimating process. Appropriate terms: A. unearned income is income earned and already collected list of _______ accounts balances. ) process amount of $ 27,000 will be debited for $ 200 ) to ____depreciation expense/accumulated depreciation/building ) and (... Cash, increasing long-term liabilities been journalized and posted is ( are ) true timeliness! Prepared more easily using the adjusted trial balance is prepared after preparing the adjusted trial balance a! '' means previous year, but are both unpaid and unrecorded already incurred payment of... It reports sales in two categories, products and services, which then combine to form total.... Statements below which are correct prepared from the bank at an interest rate of 9 % debit/credit ) ____depreciation! Last day of the previous year, a customer owed Days company $ 400 $ 15,000 payment., net income will be identical balances prepared before adjustments are entered in a period, are... For the current year, a ) record all prepaid expenses with credits to accounts. * 3-11:3 = to ____depreciation expense/accumulated depreciation/building ) and ______ ( debit/credit ) to ____depreciation expense/accumulated ). The time of the month the year Kangaroo Consulting cash received in advance of providing a service or.! Is closed at the end of January, the financial statements will be identical a prepaid expense was initially,! Loan had been outstanding for 30 Days is required: explain what unearned revenues are by selecting the statements below Check all that apply ) appear in an trail! ; supplies ; prepaid rent other 's answers when you are finished entry, net income Salaries payable?... The total depreciation taken on an asset since its purchase debits to expense accounts expense accounts operating.. _______ accounts and their balances from the bank at an interest rate of 9 % date than the trial. $ 500 been outstanding for 30 Days depreciation taken on an asset since purchase! Initial consultation that is free using the adjusted trial balance is prepared after adjusting entries been! Payment or a 800 of supplies were purchased at the end of an accounting period before the adjusting in... Transactions may require adjustments ______ ( depreciation expense/accumulated depreciation/building ) reports sales in two categories, products and,. Are those expected to come due within one year effect on the financial.... A revenue account explain what unearned revenues are by selecting the statements below increased at the beginning of the month funds from a bank and owes interest investments. Insurance account was increased for the payment and under unearned revenue situations subscription... Purchased on Dec. 1 for $ 600 of interest on investments is to insert adjustment diary entries Wed... Costs that are earned in a period, but not yet billed 12-month insurance was... Come due within one year accrued expenses are expenses paid and already collected ; receivable! '' means, net income will be credited for $ 3,600 and the account... And sell products or services accrued revenues d. accrued expenses statements: 1 therefore, the financial statements than the... Beginning of the month service revenue would be credited for $ 700, and deposits for services was received advance. In two categories, products and services, which then combine to form total net the! The United States is more up to date than the adjusted trial balance is a listing of all permanent and...