Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. It is a temporary account used during the closing process to summarize revenues and expenses. a) $360 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. B. To Provide an example as well of an accrued revenue. Depreciation is the process of allocating the costs of long-term assets over their expected useful life. -Accounts payable -The adjusted trial balance includes all accounts and balances appearing in financial statements. c) Unearned revenues refer to customer payments which have not yet been received. -Long-term investments are sometimes referred to as noncurrent investments. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. By the end of the period, $300 had not yet been earned. Supplies would be debited for $200. Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. The note is dated December 1 and is due on February 1. (Check all that apply. Select the statement below that explains how to use the Income Summary account. b) It reports amounts owed to employees and is a liability. (Check all that apply.). Therefore, the revenue must initially be recognized as a liability. Service revenue would be credited for $700. Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. c) revenue being overstated Indicate each account affected, whether the account is increased of the amount of the increase or decrease. A revenue not yet recognized; collected in advance. Which of the following accounts would be considered a prepaid expense or prepaid asset account? Cash will be debited for $600. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. b) accounts receivable being overstated. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional CFI resources listed below: A free, comprehensive best practices guide to advance your financial modeling skills, Financial Modeling & Valuation Analyst (FMVA), Commercial Banking & Credit Analyst (CBCA), Capital Markets & Securities Analyst (CMSA), Certified Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management (FPWM). d) Accounts receivable will be debited for $400. Demonstrate the required adjusting journal entry by selecting from the choices below. Accounts receivable is usually increased when accruing revenues. Explain what unearned revenues are by selecting the statements c) Debit Interest expense for $30. -Temporary accounts have a balance for one period only. b) Any unused prepaids existing at end of period are transferred to asset accounts. d) liabilities on the balance sheet will be understated. e) debit services revenue, a) credit services revenue Which of the following is (are) true regarding timeliness and the importance of periodic reporting? Multiple choice question. $1,000 of cash was received in advance of performing services. Multiple select question. Demonstrate the required journal entry on January 3 by selecting from the choices below. c) Debit Interest revenue for $600. ), -They refer to costs that are incurred in a period, but are both unpaid and unrecorded. a) The unadjusted trial balance is more up to date than the adjusted trial balance. $300 were used during the month. Multiple select question. d) Debit Cash for $600. Franchise, Identify the accounts below that would be classified as intangible assets on a classified balance sheet. Demonstrate the required adjusting entry for this company by completing the following sentence. b) Accounts receivable will be credited for $400. What is the effect of an accrued expense (such as salaries expense) adjustment on the income statement and the balance sheet? 1. c) It is increased with a debit and is considered an asset account. -They are reported on an income statement. d) Adjustments involve increasing both an expense account and a liability account. b) debit interest payable and credit cash -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.). 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? The next step is to record the amount paid by the customer as a journal entry. d) Debit Service revenue for $400. Credit The time span from when cash is used to purchase goods until cash is received from the sale of goods is called the _______ cycle, Accounts receivable Exchange your quiz with another student's quiz. -Plant assets are equipment and other assets that have a life greater than one year. Insurance expense would be debited for $300. At the end of the previous year, a customer owed Chocolates R US $500. Salaries payable will be debited for $500. Which of the statements below describe(s) a temporary account? Multiple select question. What is a work sheet? b) credit accounts payable For the current year, a business has earned (but not recorded or received) $200 of interest from investments. The payment amount of $27,000 will be recorded under cash,increasing the assets, and under unearned revenue, increasing long-term liabilities. (Check all that apply.). Trustee Program Web site. 4. prepare financial statement. Notes receivable and stock and bond investments are assets that are expected to be held for more than one year. b) The balance sheet is the first financial statement prepared. Explain what unearned revenues are by selecting the statements below which are correct. (Check all that apply.). Depreciation, Depletion and Amortization explanat 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. -Helps in the preparation of financial statements Oracle Corp reports information about pending lawsuits in the notes to . Accounting reporting principles state that unearned revenue is a liability for a company that has received payment (thus creating a liability) but which has not yet completed work or delivered goods. the required adjusting journal entry by selecting from the choices below. They refer to earnings which have been earned, but not yet billed. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. d) Unearned revenues refer to amounts owed to the company that have not yet been billed. A company borrowed $4,000 from the bank at an interest rate of 9%. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Some credit counseling agencies offer free advice; others charge a fee. -Accumulated depreciation is a contra account. (Check all that apply.) Accumulated depreciation. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. Riverbed Company Worksheet For the Month Ended June 30, 2019 Trial Balance Account Titles Dr. Cr. What percentage of total revenues is the short-term unearned revenue? a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. Demonstrate the required adjusting journal entry by selecting from the choices below. Norfolk Southern Corp. reports revenue in its income statement when the performance obligation is satisfied instead of when cash is received. 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. (Check all that apply. Examples of accrued expenses are wages expense and interest expense. Any Date Prepaid Insurance (Costof insurance policy) Cash a) Credit Interest receivable for $600. Explain what unearned revenues are by choosing the correct statement below. -The operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods or services. Explain what unearned revenues are by selecting the statements below which are correct. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. (Check all that apply.) Demonstrate the required journal entry on January 3 by selecting from the choices below. -Entering the unadjusted balance for each account in the correct Debit or Credit columns of the Unadjusted Trial Balance columns. Explain what unearned revenues are by selecting the statements below which are correct. At the end of the previous year, a customer owed Days Company $400. c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. We reviewed their content and use your feedback to keep the quality high. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. 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. A plant asset refers to a long-term tangible asset used to produce and sell products or services. As of December 31, the customer had not been billed nor had the transaction been recorded. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. (Check all that apply.) As of December 31, the customer had not been billed nor had the transaction been recorded. the purpose of the closing process is to reset _______ account balances to zero and to transfer the changes in all of these accounts to the Retained _______ account. ), -Land held for future expansion The journal entry on February 1 is? prepare an adjusted trail balance Correct Answer. Chimney's customers owe $2,000 to Chimney. (The unearned revenue account was increased at the time of the initial cash receipt.) (Check all that apply.). The required adjusting entry would be to debit the Salaries _____expense/payable) account and____debit/credit) the Salaries ____expense/payable/unearned) account. The adjustment causes an increase in an asset account and an increase in a revenue account. They are also called accounts receivable. Supplies An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. b) Credit Unearned revenues for $400. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. -Supplies were purchased at the beginning of the year, but not all were used. -The adjustment causes an increase in an asset account and an increase in a revenue account. \text{Paid-in capital in excess of par value, common stock}&\text{200,000}\\ (Check all that apply.) b) The adjusted trial balance contains only the accounts which were adjusted. -Profit margin is the ratio of a business's net income to its net sales. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. Chimney Sweeps provided chimney cleaning services to several clients during the month of February. 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. \end{array} What is the purpose of the Accumulated Depreciation account? Multiple choice question. 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