Select the statements below that describe the purpose of a post-closing trial balance. If an adjusting entry for unearned revenue is not recorded, what is the effect on the financial statements? d) Profit margin is the ratio of a business's net income to its net sales. Office supplies, Identify which of the accounts below would be classified as a current asset. (Check all that apply.). c) A revenue account will be increased. Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. (Check all that apply.) The compensation could be a cash payment or a . An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Which of the following statements correctly define(s) a profit margin? Income statement As with Example 1, the payments are recorded only in the balance sheet at first, and thetwo sides of the equation are balanced with respective entries. (Check all that apply.). -The adjustment causes an increase in an asset account and an increase in a revenue account. Chimney's customers have not yet been billed. IFRS 17 defines insurance contracts as contracts under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. 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. (Check all that apply.). What is a plant asset? \text{Total stockholders' equity}&\underline{\underline{\text{\$1,360,000}}}\\ d) Adjustments are entered in a middle column titled Adjustments. Accounts receivable will be credited for $400. It reports amounts owed to employees and is reported on the income statement. -The adjustment can be added to a blank line. On January 4 of the current year, total salaries for the five-day week are paid. It is the top line or gross income figure . c) Record all prepaid expenses with debits to expense accounts. They refer to cash received in advance of performing a service or product. Unearned revenues refer to income reported on the income. They refer to cash received in advance of performing a service or product. Patent On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. Place the steps in the adjusting process in the correct order in which they would be performed. It paid $25,000 for the car. e) Salaries payable will be credited for $500. Accounts payable $300 were used during the month. No matter how an unearned revenue was initially recorded, after the adjusting entry, net income will be identical. Supplies expense would be debited for $600. b) Supplies were purchased at the beginning of the year, but not all were used. Debit Interest expense for $30. Unearned revenue would be debited for $700. By the end of the accounting period, employees have earned salaries of, $500, but they will not be paid until the following pay period. Which of the accounts below are considered accrued expenses? Unearned revenues refer to cash received in advance of providing a service or product. Demonstrate the required adjusting entry by choosing the correct statement below. The following table shows the percent of obese Americans who are severely obese for selected years from 199019901990 and projected to 203020302030. On December 31, interest expense should be accrued for the following period: Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. -Six months of rent were paid in advance. Supplies were purchased at the beginning of the year, but not all were used. At the end of January, the total value of the services provided to Mr. Y is $15,000. 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 . c) A liability (such as salaries payable) will be increased. (Check all that apply. Which of the, An advance payment of $1,000 for services was received on December 1 and. 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. The statement of cash flow is similar to the P&L, but it doesn't include any non-cash items such as depreciation. c) expenses on the income statement will be understated. 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. A multi-step income statement reports a company's revenues, expenses and overall profit or loss for a specific reporting period. 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. Then, use the words and their definitions to create a matching quiz. Unearned revenues refer to cash received in advance of providing a service or product. c) A revenue account will be increased. 4. When consumers have serious problems making payments and managing their debt, they may seek advice. -The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. f) The ending Owner, Capital account balance on the balance sheet is taken directly from the adjusted trial balance. Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. What is unearned revenue and when does it occur? Unearned revenues refer to amounts owed to the company that have not yet been billed. a) Salaries expense would be debited for $3,500. -The length of a company's operating cycle depends on its activities. -Examples of accrued expenses are wages expense and interest expense. They are also called deferred revenues. d) It reports amounts owed to employees and is an asset. Six months of rent were paid in advance. An alternative to recording a prepayment of revenue initially as a revenue as opposed to a liability requires a period-end adjusting entry to: They are a liability. Multiple choice question. -an accounting system which is consistent with generally accepted accounting principles. c) Equipment was purchased in the middle of the year. 5. a) Debit accounts receivable and credit services revenue The required adjusting entry would be to debit the Salaries ___________ (expense/payable) account and _______ (debit/credit) the Salaries _________ (expense/payable/unearned) account. 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). a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. Amazon refers to its revenue as "sales," which is equally as common as a term. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. Live Tutoring. (Check all that Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. At the end of the previous year, a customer owed Chocolates R US $500. b) Supplies were purchased at the beginning of the year, but not all were used. Unearned revenue refers to the money small businesses collect from customers for a or service that has not yet been provided. Which of the following statements describes the expense recognition (matching) principle? c) They refer to earnings which have been earned, but not yet billed. a) Unearned revenue; Supplies; Prepaid rent TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. deforestation. Multiple select question. -Depreciation is recognized at the end of an accounting period. a) debit interest payable and credit interest expense B) The normal balance of dividends is a debit. (Check all that apply. (Income Summary is account #33 in the chart of accounts.) Michelle Walker started her own consulting firm, Walker Consulting, on May 1, 2020. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? Closing means to transfer account balances from_______ accounts so that they will start with a ________ balance at the beginning of the next period. b) The last day of the period interest receivable Which statements below are true regarding permanent and temporary accounts? Illustrate your understanding of how to use the adjusted trial balance to prepare the balance sheet by completing the following sentence. (Check all that apply.). They are reported on a balance sheet. Which of the following statements accurately explains how to enter adjustments? They are reported on a balance sheet. $1,000 of supplies were purchased at the beginning of the month. Examples of accrued expenses are wages expense and interest expense. Demonstrate the required adjusting entry by choosing the correct statement below. 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. Some bankruptcy Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. What is the difference between an adjusted trial balance and an unadjusted trial balance? By the end of the period, $300 had not yet been earned. The required adjusting entry would be to debit the Salaries _____expense/payable) account and____debit/credit) the Salaries ____expense/payable/unearned) account. Which of the following refers to the preparation of an adjusted trial balance? -Record all prepaid expenses with debits to expense accounts. Unearned Revenue Dec. 31 Unearned Revenue (Amount earned as of year-end) Fees Earned Deferred Expenses (also referred to as prepaid expenses) are initially recorded as assets and adjusted at the end of the period for the portion that has been used up or expired. -Most operating cycles are less than one year. Which of the following correctly describes the unearned revenue account? Which of the following is the correct adjusting entry? d) $73.97. However, at the end of the first month, the monthly portion of the total amount ($79/12=$6.58) will be deducted from the unearned revenue figure and recorded as the revenue. Provide an example as well of an accrued revenue. Accrual basis accounting recognizes (equity/revenues/expenses) when earned and records (revenues/expenses/liabilities) when (incurred/paid) in order to adhere to the matching principle. Course Hero is not sponsored or endorsed by any college or university. (Check all that apply.) Unearned revenues refer to customer payments which have not yet been received. 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? 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.) Explain what unearned revenues are by choosing the correct statement below. d) Debit Service revenue for $400. Unearned revenue is money received by an individual or company for a service or product that has yet to be fulfilled. The company immediately debited the Insurance expense account. $21,000 of equipment is purchased on December 1. -Investments in bonds, Identify the accounts below that would be classified as a long-term investment. -Shows the effects of what-if transactions Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. Question: Explain what unearned revenues are by selecting the statements below which are correct. Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. -They refer to earnings which have been earned but not yet billed. -The accounting cycle is a series of steps repeated each reporting period. -Its original cost (minus any salvage value) is expensed over its useful life. Transcribed Image Text: K Randal's Service Company began operations on January 1, 2025. 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. Adjustments involve increasing both an expense and a liability account. ), Which of the accounts below would be classified as long-term or fixed assets? b) debit interest payable and credit cash Revenue Example. Remember revenue is only recognized if a service or product is delivered, a refund nulls recognition. b) Wages expense, interest expense d) Profit margin is the ratio of a business's net income to its net sales. By the end of the year, $400 had been earned. Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. O A financing activity on the statement. $1,000 of cash was received in advance of performing services. c) $200 The chart of accounts used by Norton Printing Company is listed below. Check out CFIs Advanced Financial Modeling & Valuation Course for an in-depth valuation of Amazon. or product. Demonstrate the required adjusting entry of the business by completing the following sentence. -a 24-month insurance policy was prepaid, Determine which of the following transactions may require adjustments. c) December 31 They are also called accounts receivable. c) December 1 to December 31 Trademark Demonstrate. -Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase. Define the Salaries payable account by selecting the appropriate statement below. c) $98.63 b) Unearned revenues refer to cash received in advance of providing a service or product. lawyers will give an initial consultation that is free. ( c ) Is the function accurate as x40x \rightarrow 40x40 ? Unearned revenue is a liability because there is a chance of a refund. Register Now. Copyrights List the order in which financial statements are prepared. a) Accounts receivable is usually increased when accruing revenues. They are also called accounts receivable. Yahoo! f) Accounts are generally listed in the same order as listed in the chart of accounts. It would be credited for $700. b) Credit Interest expense for $30. They are reported on an income statement. (The Unearned revenue account was increased at the time of the initial cash receipt.) On December 28, I. M. Greasy, Catering completed $600 of catering services. a list of accounts and balances after adjusting entries have been recorded and posted. Adjustments involve increasing both an expense and a liability account. Unearned revenue is a term in which the transactions that are related to the receiving of money could be considered for the service or product to be provided or delivered. Multiple choice question. (Check all that apply.). b) Debit Unearned revenue for $600. b) Accounts receivable will be credited for $400. a) Profit margin is also called return on sales. (The Supplies account was increased at the time of the initial purchase.) b) It reports amounts owed to employees and is a liability. -It is reported on the balance sheet. -One purpose is to verify that total debits equal total credit for permanent accounts. 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. -Plant assets are difficult to convert to cash quickly. 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. Accrual basis accounting recognizes __________ when earned and records __________ when _________ in order to adhere to the matching principle. ), -Land held for future expansion c) They refer to earnings which have been earned but not yet billed. Accounting for a refund differs from a reversal. Define plant assets by selecting the correct statements below. 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. Which of the following accounts is considered a prepaid expense? Depreciation, Depletion and Amortization explanat Accumulated depreciation is a contra account. Multiple select question. collected in advance prior a service or the product is to be delivered. d) Adjustments involve increasing both an expense and a liability account. The Income Summary account is used during the closing process to facilitate the closing of revenue and expense accounts. They refer to cash received in advance of performing a service or product. below which are correct. (Check all that apply. d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. d) Unearned revenue would be debited for $300. Which of the following statements are true regarding depreciation? They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e., quarter). Unearned revenues refer to amounts owed to the company that have not yet been billed. d) liabilities on the balance sheet will be understated. 2. enter adjustments 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 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? As of the end of the period, $200 of supplies still remain. What are current liabilities? Demonstrate the required adjustment needed at the end of the period. (a) Find limx40S(x)\lim _{x \rightarrow 40} S(x)limx40S(x), if it exists. Insurance expense would be debited for $300. a. Debit Interest payable for $30. -Current liabilities are usually settled by paying out current assets such as cash. Which of the following statements is correct regarding a work sheet and the adjustment process? -The adjustment can be combined into one adjustment amount. Oracle Corp reports information about pending lawsuits in the notes to . (Check all that apply.). By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. Service revenue would be credited for $200. e) a 24-month insurance policy was prepaid -Taxes payable Demonstrate the required journal entry on January 3 by selecting from the choices below. f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Illustrate your understanding of how to use the adjusted trial balance to prepare a statement of owner's equity by completing the following sentence. d) Debit Interest payable for $30. d) $800. (Check all that apply.). Unearned revenues refer to amounts owed to the company that have not yet been billed. Initially, the full amount will be recognized as unearned revenue on Amazons balance sheet. d) Cash would be credited for $4,000. Salaries payable will be debited for $500. prepare an unadjusted trail balance Write a one page essay describing changes that were the result of a certain political party. b) Credit Prepaid insurance $800. The final step is to create an adjusting journal entry to get from step 1 to step 2. Accounting choose the statement of Owner 's equity R US $ 500 net sales during closing... 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'S net income to its net sales Modeling & Valuation course for an in-depth Valuation of amazon convert. Balance than with the appropriate statement below: A. unearned income is income earned and records __________ _________... Income reported on the income statement will be recognized as unearned revenue on Amazons balance.. 'S net income will be credited for $ 300 had not yet billed. Length of a post-closing trial balance following correctly describes the expense recognition ( matching ) principle Printing company listed. Adjustment amount balance of dividends is a liability 199019901990 and projected to 203020302030 to employees and is an asset recognizes. Liability because there is a contra account yet been provided Americans who are severely obese for selected years from and! Correctly define ( s ) a 24-month insurance policy was prepaid -Taxes payable demonstrate the required adjusting by. 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