(Check all that apply.). Salaries payable will be credited for $500. b) credit accounts payable b) Any unused prepaids existing at end of period are transferred to asset accounts. 3. prepare the adjusted trial balance Cash will be debited for $600. Office supplies, Identify which of the accounts below would be classified as a current asset. Trademark ), Which of the following describe the salaries payable account? c) Service revenue would be credited for $200. a) Unearned revenue; Supplies; Prepaid rent 3. prepare an adjusted trial balance Which of the following lists of assets would be classified as plant assets? 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) An adjusted trial balance is prepared after adjustments have been posted. d) Expenses are increased. (Check all that apply.) -Plant assets are equipment and other assets that have a life greater than one year. On December 27, a business completed a $400 service that had not yet been billed or recorded as of December 31. b) An adjusted trial balance has one debit column and one credit column. They are reported on a balance sheet. This principle is a major part of the (timing/adjusting/estimating) process. $300 were used during the month. (The Supplies account was increased at the time of the initial purchase.) (a) prepaid expense (b) unearned revenue (c) accrued revenue (d) accrued expense -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. A plant asset refers to the stock purchased by a business held for future investment. Demonstrate the required half of the adjusting entry by choosing the correct statement below. Wages expense will be debited for $4,000. (The Unearned revenue, account was increased at the time of the initial cash receipt.) -Entering the titles of all accounts and their account number. Commonstock-$10parvalue,50,000sharesissuedandoutstanding$500,000Paid-incapitalinexcessofparvalue,commonstock200,000Retainedearnings660,000Totalstockholdersequity$1,360,000\begin{array}{lr} b) The adjustment causes an increase in an asset account and an increase in a revenue account. -the closing process resets the balances in temporary accounts to zero. $1,000 of cash was received in advance of performing services. b) Credit Interest expense for $30. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. 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. Long-term liabilities are debts of a business that are not due to be settled within one year. -Profit margin is also called return on sales. Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. It is increased with a debit and is considered an asset account. What is an intangible asset? When consumers have serious problems making payments and managing their debt, they may seek advice. ), Which of the accounts below would be classified as long-term or fixed assets? 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 Unearned revenue would be debited for $300. e) a 24-month insurance policy was prepaid It can help with adjusting and closing accounts and with preparing financial statements. What is the difference between an adjusted trial balance and an unadjusted trial balance? $300 were used during the month. Identify which group of accounts may require adjustments at the end of the accounting period. b) January 15 c) A revenue account will be increased. Statement of Owner's Equity (Retained Earnings) Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e., quarter). (Check all that apply. Calculate the first month's depreciation expense as of December 31 using the straight-line method. Adjustments involve increasing both an expense and a liability account. A plant asset is considered temporary and will be used up within one accounting period. 800 of supplies were purchased at the beginning of the month and the Supplies account was increased. (Check all that apply.) c) Only the debited or credited account of each adjustment needs to be shown--not both accounts. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Multiple choice question. Supplies would be debited for $300. is optional. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. -It is a tangible long-term asset. -They are reported on an income statement. Multiple choice question. d) Debit Cash for $600. interest revenue. They are also called accounts receivable. Example of Unearned Revenue 4. Source: amazon.com. -Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. (Check all that apply.). -Depreciation is recorded through an adjusting entry. d) $800. A revenue not yet recognized; collected in advance. the required adjusting journal entry by selecting from the choices below. The P&L helps you compare your sales and expenses and make forecasts. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? Adjustments involve increasing both an expense and a liability account. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? The term is used in accrual accounting, in which revenue is recognized only when the payment has been received by a company AND the products or services have not yet been delivered to the customer. They are reported on a balance sheet. Describe the effect of an accrued revenue adjustment on the income statement and the balance sheet by choosing from the statements below. Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. Place the steps in the adjusting process in the correct order in which they would be performed. Supplies Riverbed Company Worksheet For the Month Ended June 30, 2019 Trial Balance Account Titles Dr. Cr. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. g) New accounts may need to be added because of the adjusting process. Unearned revenues refer to cash received in advance of providing a service or product. D) The normal balance of an expense account is a credit. Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. 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. As of December 31, the customer had not been billed nor had the transaction been recorded. The payment amount of $27,000 will be recorded under cash,increasing the assets, and under unearned revenue, increasing long-term liabilities. The journal entry to record the payment of salaries on January 4 includes: -Examples of accrued expenses are wages expense and interest expense. b) It reports amounts owed to employees and is a liability. -Permanent accounts are reported on the balance sheet. b) Accounts receivable will be debited for $500. apply.). (Check all that apply.). Cash would be credited for $4,000. $300 were used during the month. Yahoo! . In the first step, you identified whether the deferred revenue is a current or long-term liability. -A temporary account has a balance for only one period. Define the Salaries payable account by selecting the appropriate statement below. Patent Supplies would be debited for $200. d) Unearned revenue would be debited for $300. Adjustments involve increasing both an expense and a liability account. Define the Salaries payable account by selecting the appropriate statement below. Record the amount paid by the customer. -The ending Retained Earnings account balance on the balance sheet is transferred from the statement of retained earnings. b. c) Debit accounts receivable and credit cash, a) Debit accounts receivable and credit services revenue. d) Record receipt with a debit to the Rent revenue account. B. Contra asset is an account shown as an addition to the asset. \text{Total stockholders' equity}&\underline{\underline{\text{\$1,360,000}}}\\ a) liabilities on the balance sheet will be overstated. The company records prepaid and unearned items in balance sheet accounts. At the end of the previous year, a customer owed Days Company $400. Which of the following is the proper adjusting entry? -Accounts receivable is usually increased when accruing revenues. service revenue, What is the date primarily used in adjusting entries? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. E) The normal balance of the common stock account is a credit. Reason: Unearned revenues refer to customer payments which have been received in advance of providing the service or product. Unearned revenue, Utility expense In order to prepare an income statement using the account balances on an adjusted trial balance, all of the ______ (revenues/liabilities) and their credit balances are transferred to the income statement as well as all of the ______ (expenses/assets) and their ______ (debit/credit) balances. d) $73.97. A company borrowed $10,000 from the bank at 5% interest. Multiple choice question. c) Record all prepaid expenses with debits to expense accounts. b) Supplies were purchased at the beginning of the year, but not all were used. a) Unearned revenues refer to income reported on the income statement. (Check all that apply.). d) Debit Interest payable for $30. b. Multiple select question. Select the statement below that describes a post-closing trial balance. Describe the final step in the adjusting process. -Accounts payable By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. ( ) -Supplies were purchased at the beginning of the year, but not all were used. -The cycle contains steps for adjusting and closing accounts. Oracle Corp reports information about pending lawsuits in the notes to . 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. Multiple select question. -The adjusted trial balance includes all accounts and balances appearing in financial statements. Reason: where xxx is the number of years after 198019801980. Demonstrate the required adjusting journal entry by selecting from the choices below. (Check all that apply. Which of the following correctly describes the unearned revenue account? Chimney's customers owe $2,000 to Chimney. Demonstrate. 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 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. The compensation could be a cash payment or a . Demonstrate the required journal entry on January 3 by selecting from the choices below. (Check all that apply.). S(x)=0.00850x2+1.25x+0.8540.264x2+10.7x66.9. b) Net income is increased. Debit Unearned revenues for $600. Demonstrate the required adjusting journal entry by selecting from the choices below. b) It reports amounts owed to employees and is a liability. d) Accounts receivable will be credited for $500. Prepare an adjusted trial balance. should be recorded when goods or services are provided to customers at an amount expected to be received. a) The adjusted trial balance is used to prepare financial statements. d) Owner, capital, Owner withdrawal. The statement of cash flow is similar to the P&L, but it doesn't include any non-cash items such as depreciation. $1,000 of cash was received in advance of performing services. Explain what unearned revenues are by selecting the statements below which are correct. a) $360 f) They are reported on an income statement. The trial balance at May 31 is as follows. -Depreciation is the process of allocating the cost of an asset to the period the asset benefits. (Check all that apply. Unearned revenues refer to income reported on the income. 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). -Equipment was purchased in the middle of the year. The same is to be shown as the liability on the balance sheet (Check all that apply.) Cash, Building, Equipment. Check each other's answers when you are finished. ), -Land held for future expansion Solution for For journal entries 1 through 10, identify the explanation that mostly closely describes it. 3. Accounts receivable will be credited for $400. (Check all that apply.) 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explain what unearned revenues are by selecting the statements below