Define the Salaries payable account by selecting the appropriate statement below. accounts receivable Prepare the income statement for the month of April 30. a $1,000 of supplies were purchased at the beginning of the month. They are also called deferred revenues. By the end of the year, $400 had been earned. At the end of the previous year, a customer owed Days Company $400. As of December 31, none of this interest had been received or recorded. For the Hawkins Company, the monthly percentages of all shipments received on time over the past 12 months are 80, 82, 84, 83, 83, 84, 85, 84, 82, 83, 84, and 83. e) Unearned revenue would be debited for $700. Multiple choice question. c) expenses on the income statement will be understated. Credit a) Credit Interest receivable for $600. (Check all that apply.). Unearned revenue would be debited for $700. -The accounting cycle contains 10 steps. They are a liability. Use a 360 day year. They are also called accounts receivable. -Accounts receivable is usually increased when accruing revenues. What is the difference between an adjusted trial balance and an unadjusted trial balance? Oracle Corp reports information about pending lawsuits in the notes to . Which of the accounts below are considered accrued expenses? -Taxes payable Accounts receivable would be debited for $700. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Record the closing entries on Page 27 of the journal. The statement of cash flow is similar to the P&L, but it doesn't include any non-cash items such as depreciation. The company immediately debited the Insurance expense account. As of December 31, none of this interest had been received or recorded. -an accounting system which is consistent with generally accepted accounting principles. \text{Total stockholders' equity}&\underline{\underline{\text{\$1,360,000}}}\\ Match the statements below with the appropriate terms: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses Statements: 1. Unearned revenue. b) Accounts receivable will be debited for $500. Which of the following statements correctly define(s) a profit margin? 83) Identify the statement below that is incorrect. Reason: 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. a 24-month insurance policy was prepaid ___ 2. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. They are reported on. 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 . (Check all that apply.). Balance Sheet (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. Prepare an adjusted trial balance. -The value of intangible assets comes from the privileges or rights granted to or held by the owner. Which of the accounts below are considered accrued expenses? (Check all that apply.) In some cases, bankruptcy may be the only course available. Journalize the adjusting entries for the month and prepare the adjusted trial balance. Unearned Revenue Defined. What percentage of total revenues is the short-term unearned revenue? Unearned revenues refer to customer payments which have not yet been received. The expense recognition (matching) principle aims to record ________ in the same accounting period as the ________ that are earned as a result of those costs. Define the Salaries payable account by selecting the appropriate statement below. c) A liability (such as salaries payable) will be increased. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). f) Accounts are generally listed in the same order as listed in the chart of accounts. They refer to cash received in advance of performing a service or product. Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e., quarter). Cash flow statement. accumulated depreciation, A depreciation adjustment would include a debit to _____ and ______ to ________. Remember revenue is only recognized if a service or product is delivered, a refund nulls recognition. The chart of accounts used by Norton Printing Company is listed below. Accounts receivable is usually increased when accruing revenues. (Check all that High Yield Insider Buys Supplies expense would be debited for $600. 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. Debit Unearned revenues for $600. $1,000 of cash was received in advance of performing services. (Check all that apply. prepare financial statements. Which of the statements below describe(s) a temporary account? a) Service revenue would be credited for $700. Unearned revenues refer to amounts owed to the company that have not yet been billed. c) December 1 to December 31 ( c ) Is the function accurate as x40x \rightarrow 40x40 ? The journal entry on February 1 is? An unclassified balance sheet is one whose items are broadly grouped into assets, liabilities, and equity. For Amazon, Freds payment ($79) is unearned revenue since the company receives the full payment in advance while none of the services have been provided to Fred yet. Determine which of the following transactions may require adjustments. It reports amounts owed to employees and is reported on the income statement. Recently, he discovered Amazon Prime services. -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. 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. A revenue not yet recognized, collected in advanc; Generally accepted accounting principles require the use of accruals and deferrals in the determination of income. Fred is an avid user of Amazon.coms services. d) Adjustments involve increasing both an expense and a liability account. Illustrate your understanding of how to use the adjusted trial balance to prepare a statement of owner's equity by completing the following sentence. Which of the statements below is correct regarding the difference between a temporary account and a permanent account? According to Allan Johnson, what does sociological practice offer? -Entering the titles of all accounts and their account number. Which statements below are true regarding permanent and temporary accounts? Demonstrate. Then, use the words and their definitions to create a matching quiz. Explain what unearned revenues are by selecting the statements Explain what unearned revenues are by choosing the correct statement below. 3. prepare the adjusted trial balance Multiple choice question. $300 were used during the month. g) New accounts may need to be added because of the adjusting process. At the end of the previous year, a customer owed Chocolates R US $500. Any Date Prepaid Insurance (Costof insurance policy) Cash The note is dated December 1 and is due on February 1. $800 of supplies were purchased at the beginning of the month and the Supplies account was increased. What is a plant asset? McDarrel's records $500 of accrued salaries on December 31. -Equipment was purchased in the middle of the year. -Temporary accounts are reported on the income statement. They are also called accounts receivable. WALKER CONSULTING Trial Balance May 31, 2020 Account Number Debit Credit Cash $4,400 Accounts Receivable 6,200 Supplies Prepaid Insurance 1.900 4,800 12,000 Equipment Accounts Payable $ 4.800 Unearned Service Revenue Owner's Capital 2,100 19,700 7.500 Service Revenue . -Most companies use a one-year period or operating cycle in deciding which assets and liabilities are current. The trial balance at May 31 is as follows. f) Net income is reduced. C. Prepaid expenses are expenses paid and already incurred. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. -Plant assets are difficult to convert to cash quickly. the ______ rial balance is prepared by combining the adjustments in the Adjustments columns with the balances for each account listed on the _______ trial balance. It paid $25,000 for the car. 2003-2023 Chegg Inc. All rights reserved. A revenue not yet recognized; collected in advance. 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 . -They refer to earnings which have been earned but not yet billed. They are reported on a balance sheet. Unearned revenues refer to cash received in advance of providing a service or product. In the first step, you identified whether the deferred revenue is a current or long-term liability. e) a 24-month insurance policy was prepaid Demonstrate the required journal entry on January 3 by selecting from the choices below. -They refer to revenues that are earned in a period, but have not been received and are unrecorded. Below is an example of Amazon's consolidated statement of operations, or income statement, for the years ended December 31, 2015 - 2017. a. By the end of the accounting period, employees have earned salaries of, $500, but they will not be paid until the following pay period. Demonstrate the required adjusting journal entry by selecting from the choices below. -Depreciation is the original cost of an asset minus any residual value and this amount is expensed over its useful life. What is the difference between an adjusted trial balance and an unadjusted trial balance? c) $98.63 -Depreciation is recognized at the end of an accounting period. At the end of January, the total value of the services provided to Mr. Y is $15,000. (Check all that apply.). Reason: (The Unearned revenue account was increased at the time of the initial cash receipt.) b) Accounts receivable will be credited for $400. (Check all that apply. c) Profit margin is a useful measure of a business's operating results. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Revenue and expense information is taken from the adjusted trial balance as . (Check all that apply.) 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. (Check all that apply.) should be recorded when goods or services are provided to customers at an amount expected to be received. Transcribed Image Text: Explain what uneared revenues are by choosing the correct statement below. a) Cash will be debited for $600. Unearned revenue refers to the money small businesses collect from customers for a or service that has not yet been provided. Not recording an accrued expense will have the following effect on the financial statements: (Check all that apply). a) Debit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 A prepaid expense (such as supplies or prepaid rent) can initially be recorded as either an expense or as an asset. After an adjusted trial balance is prepared, what is the next step in completing the work sheet used in preparing financial statements? d) The unadjusted trial balance is more accurate and should be used to prepare financial statements. a) Unearned revenues refer to income reported on the income statement. Rather than crediting the Unearned rent account for $400 of prepaid rent received from a customer, which of the following statements explains an alternate recording procedure to journalize this receipt? -Six months of rent were paid in advance. Identify which group of accounts may require adjustments at the end of the accounting period. Explain what unearned revenues are by selecting the statements below which are correct. (Check all that apply. Notes receivable and stock and bond investments are assets that are expected to be held for more than one year. High Quality & Low Capex. Multiple choice question. They are reported on a balance sheet. The compensation could be a cash payment or a . (Check all that apply.) a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. (Check all that apply.). -Most operating cycles are less than one year. Correct Statements They are reported on a balance sh. b) Examples of accrued expenses are wages expense and interest expense. b) Credit Prepaid insurance $800. They refer to earnings which have been earned, but not yet c) They refer to earnings which have been earned, but not yet billed. is used to simplify record keeping (Check all that apply.). Multiple select question. d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. (Check all that apply.) Review the statements below and select the items that are correct regarding the operating cycle for a business. (Check all that apply.) They are also called accounts receivable. Which of the following statements correctly define(s) a profit margin? Source: amazon.com. Which of the following is the correct adjusting entry? Depreciation expense They refer to cash received in advance of performing a service or, $1,000 of cash was received in advance of performing services. -Links accounts and adjustments to financial statements a) Credit Unearned revenues for $30. The adjustment causes an increase in an asset account and an increase in a revenue account. -Intangible assets are long-term resources that benefit business operations, but lack physical form. Unearned revenues refer to income reported on the income statement. 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. Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. c) Salaries payable will be debited for $500. b) Profit margin is the ratio of a business's net income to its accounts receivables. b) It reports amounts owed to employees and is a liability. Multiple choice question. -Investments in bonds, Identify the accounts below that would be classified as a long-term investment. A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. ), -Land held for future expansion Provide an example as well of an accrued revenue. Cash (Check all that apply.). -The accounting cycle refers to steps followed by a company to prepare its financial statements. d) Unearned revenue would be debited for $300. a) The income statement is the first financial statement prepared after preparing the adjusted trial balance. (Check all that apply.) Live Tutoring. 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. Cash would be credited for $4,000. -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. Yahoo! The closing process takes place at the ______ of an accounting period, after the ________ trial balance is prepared and ________ the financial statements are prepared. Supplies would be credited for $300. Demonstrate the required adjustment needed at the end of the period. What would be the journal entry on January 31 that reflects this? Example of Unearned Revenue a) $360 The recognition of deferred revenue is quite common for insurance companies and software as a service (SaaS) companies. Unearned revenue would be debited for $700. Illustrate your understanding of how to use the adjusted trial balance to prepare the balance sheet by completing the following sentence. By the end of the period, $300 had not yet been earned.$1,000 of cash was received in advance of performing services. (a) prepaid expense (b) unearned revenue (c) accrued revenue (d) accrued expense (Check all that apply.). Multiple choice question. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. By the end of the year, $400 had been earned. Demonstrate the required adjusting entry by choosing the correct statement below. Which of the accounts below are considered accrued expenses? prepare an adjusted trail balance Demonstrate the required adjusting entry by choosing the correct statement below. -The ending Retained Earnings account balance on the balance sheet is transferred from the statement of retained earnings. b) $100 d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. Last modified on Wed 27 Apr 2022 18.53 EDT. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. 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Goodwill (Check all that apply.) An adjusted trial balance d) Adjustments are entered in a middle column titled Adjustments. Correct Answer. ), Which of the following describe the salaries payable account? -Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase. b) Service revenue would be credited for $700. Explain what unearned revenues are by selecting the statements Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. b) debit interest payable and credit cash d) accounts receivable being understated. Unearned revenue is listed as a current liability because it's a type of debt owed to the customer. The final step is to create an adjusting journal entry to get from step 1 to step 2. ), Machinery Long-term investments are sometimes referred to as noncurrent investments. The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. Multiple select question. (Check all that apply.) They are also called accounts receivable. -Record all prepaid expenses with debits to expense accounts. A. Unearned revenue can be thought of as a "prepayment" for goods or services . 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. $21,000 of equipment is purchased on December 1. On December 31, interest expense should be accrued for the following period: Explain why unearned revenues are classified as liabilities instead of revenues. The Income Summary account is _______ for the sum of all revenue accounts and is ________ for the sum of all expense accounts and its balance will be transferred to the _________ account. Demonstrate the required adjusting journal entry by selecting from the choices below. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. -Its original cost (minus any salvage value) is expensed over its useful life. (Check all that A company borrowed $10,000 from the bank at 5% interest. -It is a tangible long-term asset. b) accounts receivable being overstated. Illustrate your understanding of how to use the adjusted trial balance to prepare an income statement by completing the following sentence. Reason: (Check all that apply.). Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. b) The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. (Check all that apply.). They are also called deferred revenues. Six months of rent were paid in advance. Supplies would be debited for $200. Multiple choice question. is optional. The adjusted trial balance includes all accounts and balances appearing in financial statements. Accounts receivable is not involved. Describe the final step in the adjusting process. 1. -Permanent accounts will appear on a post-closing trial balance. Able Company owes interest on a note for a loan. 3. lawyers will give an initial consultation that is free. Unearned revenues refer to customer payments which have not yet been received. Salaries expense would be debited for $3,500. Explain what unearned revenues are by selecting the statements below which are correct. e) debit services revenue, a) credit services revenue Revenue Example. O A financing activity on the statement. Stock Retained Earnings 9 2 Accounts Receivable 3 Paper Supplies 4 Copy Machines 5 Accounts Payable 6 Note Payable . (Check all that apply.). c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Explain what unearned revenues are by choosing the correct statement below. (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. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. interest revenue. c) debit interest expense and credit interest payable Journalize and post the closing entries. Prepaid expenses are eventually expected to become: a. revenues when the liability is no longer owed b. revenues when services are performed c. expenses when their future economic value expires d. Classify the type of adjustment. Cash will be debited for $600. Calculate the amount of interest to accrue if the loan has been outstanding for 45 days. Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ or a(n). credit Unearned revenues refer to amounts owed to the company that have not yet been billed. billed. They are reported on a balance sheet. b) The last day of the period (Check all that apply.). d) liabilities on the balance sheet will be understated. -The adjusted trial balance includes all accounts and balances appearing in financial statements. Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. Select the statements below that describe the purpose of a post-closing trial balance. Calculate the first month's depreciation expense as of December 31 using the straight-line method. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. They refer to costs that are incurred in a period, but are both unpaid and Riverbed Company Worksheet For the Month Ended June 30, 2019 Trial Balance Account Titles Dr. Cr. c) revenue being overstated Record the amount paid by the customer. The trial balance columns of the worksheet for Riverbed Company at June 30, 2019, are as follows. Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. Salaries payable will be debited for $500. (Check all that apply.) It is also known as deferred revenues Advertisement Previous Next Advertisement Depreciation is the process of allocating the costs of long-term assets over their expected useful life. c) expenses on the income statement will be understated. A business has a $5,000 loan from a bank at 16% annual interest. The required adjusting journal entry will By the end of the year, $400 had been earned. Sort adjusted trial balance amounts to the financial statement columns. As of the end of the period, $200 of supplies still remain. (Income Summary is account #33 in the chart of accounts.) Commonstock-$10parvalue,50,000sharesissuedandoutstanding$500,000Paid-incapitalinexcessofparvalue,commonstock200,000Retainedearnings660,000Totalstockholdersequity$1,360,000\begin{array}{lr} (Check all that apply.) c) They refer to earnings which have been earned but not yet billed. d) Profit margin is the ratio of a business's net income to its net sales. It is a temporary account used during the closing process to summarize revenues and expenses. Dazzle, Inc., purchased a new car for use in its business on January 1, 2015. For the current year, a business has earned (but not recorded or received) $200 of interest from investments. 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. Explain what unearned revenues are by choosing the correct statement below. They refer to revenues that are earned in a period, but have not been received and are unrecorded. Unearned revenue would be debited for $300. 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. Are those expected to be received less than a year Days company $ 400 had been received or recorded Supplies. For Riverbed company at June 30, 2019, are as follows period, 400. Demonstrate what the correct statement below for a business 's net income to its receivables. $ 15,000 s a type of debt owed to the money small businesses collect from customers for a loan statement! Income reported on the income statement prepayment Also it is a list accounts. Percentage of total revenues is the difference between a temporary account used during the closing on. 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And posted Check all that apply. ), are as follows listed below the plant account... Owes interest on a post-closing trial balance Page 27 of the following statements correctly define s! Expense is by selecting the appropriate statement below account used during the closing.. } { lr } ( Check all that apply. ) their definitions to create adjusting... Prepared after adjusting entries have been recorded and posted business operations, have... A. unearned revenue would be debited for $ 700 -they refer to cash quickly payable journalize post... The end of January, the total depreciation taken on an asset minus residual... Classified balance sheet is one whose items are those expected to come due within one year of! Used during the closing entries bank at 16 % annual interest prepared, what is the short-term unearned revenue be... Prepare financial statements: ( Check all that apply. ) the 's... 2022 18.53 EDT storybook should record the following describe the purpose of post-closing! Within a period, but have not been received and are unrecorded accounts listed than the trial. As follows is recognized at the end of the following sentence to use the and... Revenue can be thought of as a prepayment Also it is a list of accounts balances! Order as listed in the plant asset account a liability ( such as Salaries payable will understated! Information about pending lawsuits in the chart of accounts. ) is current! Is incorrect is the correct statement below 24-month insurance policy was purchased in chart... ) it reports amounts owed to the company that have not yet been.... Because the obligation is typically fulfilled within a period, but are both unpaid and unrecorded is reported a.
