A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. Accounts receivable will be credited for $400. Explain what unearned revenues are by choosing the correct statement below. (Check all that apply.). It is a more detailed alternative to the single-step income . Unearned revenue, also known as deferred revenue, is a customer's advance payment for a product or service that has yet to be provided by the company. Multiple choice question. $800 of supplies were purchased at the beginning of the month and the Supplies account was increased. -Current liabilities are usually settled by paying out current assets such as cash. b) $100 Unearned revenue is money received by an individual or company for a service or product that has yet to be fulfilled. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. The journal entry to close all of a company's expense accounts would include a ________ to each of the expense accounts and a corresponding __________ to the Income ________ account. (Check all that apply. Accrued _______ are earned in a period that are both unrecorded and not yet received in cash. Adjustments involve increasing both an expense and a liability account. (The Supplies account was increased at the time of the initial purchase.) They are reported on a balance sheet. d) Accounts receivable will be credited for $500. (Check all that apply.). d) Unearned revenue would be debited for $300. By the end of the period, $300 had not yet been earned. -The adjusted trial balance is used to prepare financial statements. Stock Retained Earnings 9 2 Accounts Receivable 3 Paper Supplies 4 Copy Machines 5 Accounts Payable 6 Note Payable . Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. The closing process takes place at the ______ of an accounting period, after the ________ trial balance is prepared and ________ the financial statements are prepared. The revenues of a company are the net sales proceeds. By the end of the accounting period, the loan had been outstanding for 30 days. Accounts receivable is usually increased when accruing revenues. d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. b) $199.26 Demonstrate the required adjusting entry for this company by completing the following sentence. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. By the end of the year, $400 had been earned. Supplies would be credited for $200. c) Service revenue would be credited for $200. (Put the first step at the top.) They are reported on a balance sheet. d) $800. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. b) Net income is increased. Credit Unearned revenues for $30. Oracle Corp reports information about pending lawsuits in the notes to . They are reported on a balance sheet. ), 1. enter the unadjusted trial balance Dazzle, Inc., purchased a new car for use in its business on January 1, 2015. Accounts receivable would be debited for $700. b) Any unused prepaids existing at end of period are transferred to asset accounts. Multiple select question. 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. It is the top line or gross income figure . Which of the following statements accurately explains how to enter adjustments? -They refer to earnings which have been earned but not yet billed. (Check all that apply.). Select the statement below that describes a post-closing trial balance. c) Record all prepaid expenses with debits to expense accounts. $1,000 of cash was received in advance of performing services. -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. f) Accounts are generally listed in the same order as listed in the chart of accounts. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. Unearned revenues refer to amounts owed to the company that have not yet been billed. The journal entry on February 1 is? ), Which of the following describe the salaries payable account? A plant asset is the portion of a current asset which will be used up in the next accounting period. (Check all that apply.) Being overweight increases the risk of diabetes, heart disease, and many other ailments, but the severely obese (BMI\mathrm{BMI}BMI 40\geq 4040 ) are most at risk and the most expensive to treat. a) Rent was paid for the month. 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. Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. They are also called accounts receivable. Prepaid rent -The accounting cycle is a series of steps repeated each reporting period. Which of the following correctly describes the unearned revenue account? Income statement Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ (revenue/expense) or a(n) ______ (liability/expense). Calculate the amount of interest to accrue if the loan has been outstanding for 90 days. a. It is estimated that it will have a life of 5 years and zero salvage value. Cash would be credited for $4,000. b) remove the unearned amount to a liability account 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. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. Examples of accrued expenses are wages expense and interest expense. Explain what unearned revenues are by selecting the statements below which are correct. a) Accounts receivable would be debited for $700. $1,000 of cash was received in advance of performing services. Supplies expense would be debited for $700. interest revenue. If an adjusting entry for unearned revenue is not recorded, what is the effect on the financial statements? (Check all that apply.) Which of the accounts below are considered accrued expenses? Which of the following statements is correct regarding a work sheet and the adjustment process? Define the Salaries payable account by selecting the appropriate statement below. Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. 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. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. Check each other's answers when you are finished. c) Cash, building, equipment -The adjustment can be squeezed in on one line of the trial balance. Commonstock-$10parvalue,50,000sharesissuedandoutstanding$500,000Paid-incapitalinexcessofparvalue,commonstock200,000Retainedearnings660,000Totalstockholdersequity$1,360,000\begin{array}{lr} Correct Statements They are reported on a balance sh. -Most companies use a one-year period or operating cycle in deciding which assets and liabilities are current. Blank 3: payable, Which of the following describes accrued revenue? Prepare the income statement for the month of April 30. 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. Thank you for reading CFIs guide to Unearned Revenue. Revenue and expense information is taken from the adjusted trial balance as . Demonstrate the required journal entry on January 3 by selecting from the choices below. 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 Explain what unearned revenues are by selecting the statements below which are correct. -Depreciation is the original cost of an asset minus any residual value and this amount is expensed over its useful life. b) Credit Unearned revenues for $400. ), -Land held for future expansion (Check all that apply.). Unearned revenue is listed as a current liability because it's a type of debt owed to the customer. Depreciation expense c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Transcribed Image Text: K Randal's Service Company began operations on January 1, 2025. A business has a $5,000 loan from a bank at 16% annual interest. Unearned revenues refer to customer payments which have not yet been received. d) Cash would be credited for $4,000. The difference between income and revenues is self-explanatory. c) Record all prepaid expenses with debits to expense accounts. The income statement is the first financial statement prepared after preparing the adjusted trial balance. e) Service revenue will be credited for $600. Multiple choice question. recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. A plant asset can be defined by which of the following statements? Define plant assets by selecting the correct statements below. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. b) credit accounts payable Debit Interest expense for $30. How will Chimney Sweeps record this transaction? Demonstrate the required adjusting entry by completing the following sentence. -They are a liability. Unearned revenues refer to cash received in advance of providing a service or product. Demonstrate the required adjusting journal entry by selecting from the choices below. Explain the difference between the unadjusted and the adjusted trial balance. Demonstrate the required adjusting entry by choosing the correct statement below. Service revenue would be credited for $200. 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. the required adjusting journal entry by selecting from the choices below. 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). c) Salaries payable will be debited for $500. Unearned revenues refer to income reported on the income statement O Unearned revenues This problem has been solved! b) Net income is increased. Debit Depreciation expense; credit Accumulated depreciation. Which of the following statements about the Accumulated depreciation account is (are) correct? Demonstrate what the correct adjusting entry should include by choosing the correct statement below. -Examples of accrued expenses are wages expense and interest expense. They are also called deferred revenues. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. d) liabilities on the balance sheet will be understated. (Check all that apply.) -Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase. (Check all that apply. 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. Accrual basis accounting recognizes __________ when earned and records __________ when _________ in order to adhere to the matching principle. What does this trend signal? When does the closing process take place? Debit unearned revenues for $ At the end of the previous year, a customer owed Chocolates R US $500. b) Wages expense will be debited for $4,000. $10,000 x.08 x 45/360. Riverbed Company Worksheet For the Month Ended June 30, 2019 Trial Balance Account Titles Dr. Cr. a) Credit Unearned revenues for $30. a) Cash will be debited for $600. 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. -Its original cost (minus any salvage value) is expensed over its useful life. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. (Check all that apply.) a) Record all prepaid expenses with credits to liability accounts. a) Accounts receivable is usually increased when accruing revenues. A company using a calendar year-end will record an adjusting entry for a bill received on January 15 for services received during the month of December on: Identify which group of accounts may require adjustments at the end of the accounting period. What is unearned revenue and when does it occur? 1) determine what the current account balance equals 2) determine what the current account balance should equal 3) record an adjusting entry Place the steps in the adjusting process in the correct order in which they would be performed. -Profit margin is also called return on sales. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. b) Unearned revenues refer to cash received in advance of providing a service or product. Use a 360 day year. Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e., quarter). a) Debit Unearned revenues for $400. Salaries payable will be credited for $500. a) Cash will be debited for $600. Multiple choice question. a) An adjusted trial balance is prepared after adjustments have been posted. Answer: Unearned revenues refer to cash received in advance of providing a service or product. This principle is a major part of the _________ process. Credit Interest expense for $30. Michelle Walker started her own consulting firm, Walker Consulting, on May 1, 2020. -Businesses report financial information at regular intervals to ensure timeliness of data. McDarrel's records $500 of accrued salaries on December 31. a) debit interest payable and credit interest expense A similar procedure will be repeated each subsequent month until the end of the 12th month when the last portion of the payment will be recognized as revenue. -Long-term investments are sometimes referred to as noncurrent investments. c) Debit Interest expense for $30. d) Accounts receivable will be debited for $400. -Temporary accounts are reported on the income statement. 4. prepare financial statement. c) increase the cash account at period-end, b) remove the unearned amount to a liability account, Chapter 8 Accounting for Long-Term Assets, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, James F. Sepe, J. David Spiceland, Mark W. Nelson, Wayne Thomas. They are reported on an income statement. Demonstrate the required adjusting journal entry by selecting from the choices below. (Check all that apply. \text{Retained earnings }&\underline{\text{\hspace{13pt}660,000}}\\ b) The adjustment causes an increase in an asset account and an increase in a revenue account. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Demonstrate the required adjusting entry by choosing the correct statement below. b) It reports amounts owed to employees and is a liability. As of December 31, the customer had not been billed nor had the transaction been recorded. (Check all that apply.) Which of the accounts below are considered accrued expenses? The required adjusting entry would be to debit the Salaries ___________ (expense/payable) account and _______ (debit/credit) the Salaries _________ (expense/payable/unearned) account. -The accounting cycle contains 10 steps. b) Income statement, statement of owner's equity, balance sheet, statement of cash flows -Shows the effects of what-if transactions O An asset on the balance sheet. Unearned Revenue. 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