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. A plant asset is the portion of a current asset which will be used up in the next accounting period. Able Company owes interest on a note for a loan. d) Adjustments are entered in a middle column titled Adjustments. b) Unearned revenues refer to cash received in advance of providing a service or product. By the end of the period, $300 had not yet been earned.$1,000 of cash was received in advance of performing services. b) accounts receivable being overstated. f) The ending Owner, Capital account balance on the balance sheet is taken directly from the adjusted trial balance. 800 of supplies were purchased at the beginning of the month and the Supplies account was increased. c) Salaries payable will be debited for $500. Supplies expense would be debited for $300. Briefly review the history of political parties in the United States. 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). In order to prepare the statement of owner's equity, the Owner _______ (Capital, Cash) account balance as well as any debit balance in the ______ (Withdrawals, Supplies) account is transferred from the adjusted trial balance and is used along with the reported net income (loss) from the Income statement. (Check all that apply.) Question: Explain what unearned revenues are by selecting the statements below which are correct. It is also known as deferred revenues Advertisement Previous Next Advertisement -The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. Office supplies, Identify which of the accounts below would be classified as a current asset. $300 were used during the month. -Helps in the preparation of financial statements TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. Norfolk Southern Corp. reports revenue in its income statement when the performance obligation is satisfied instead of when cash is received. (Check all that apply.). ( ) f) They are reported on an income statement. c) The date is unimportant b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. -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 choosing the correct statement below. Since $300 has not been earned, it means that $700 has been earned. They refer to revenues that are earned in a period, but have not been received and are unrecorded. 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. Multiple select question. g) Six months of rent were paid in advance. Unearned Revenue. e) Service revenue will be credited for $600. Unearned revenues refer to cash received in advance of providing a service or product. The expense recognition (matching) principle aims to record ________ in the same accounting period as the ________ that are earned as a result of those costs. As of December 31, none of this interest had been received or recorded. -A temporary account What are current liabilities? 5. View Explain what unearned revenues are by selecting the statements below which are correct.png from ACCT 301 at American River College. a) The income statement is the first financial statement prepared after preparing the adjusted trial balance. b) Debit Interest receivable for $600. Prepare the income statement for the month of April 30. 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. (Check all that apply.). Unearned revenue refers to the money small businesses collect from customers for a or service that has not yet been provided. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Revenue Example. -The adjustment can be squeezed in on one line of the trial balance. Supplies expense would be credited for $300. below which are correct. Determine which of the following transactions may require adjustments. -Entering the unadjusted balance for each account in the correct Debit or Credit columns of the Unadjusted Trial Balance columns. \text{Total stockholders' equity}&\underline{\underline{\text{\$1,360,000}}}\\ Explain what unearned revenues are by selecting the statements below which are correct. a) Debit Unearned revenues for $400. b) no interest should be accrued b) debit interest payable and credit cash d) Unearned revenue would be debited for $300. The revenue recording in the accounting books of an entity is necessary to calculate the net income. For the current year, Bubbles Office Supply had earned $600 of interest on investments. a) Debit accounts receivable and credit services revenue accounts receivable Multiple choice question. d) The revenues on the income statement will be understated. (Check all that apply) 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: -An account whose balance equals net income or net loss If the company fails to deliver the promised product or service or a customer cancels the order, the company will owe the money paid by the customer. Unearned revenue, sometimes referred to as deferred revenue, is payment received by a company from a customer for products or services that will be delivered at some point in the future. \text{Common stock-\$10 par value, 50,000 shares issued and outstanding}&\text{\$\hspace{7pt}500,000}\\ c) Record all prepaid expenses with debits to expense accounts. Experts are tested by Chegg as specialists in their subject area. a) December 1 to February 1 Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. Multiple choice question. Debit Unearned revenues for $400. No matter how an unearned revenue was initially recorded, after the adjusting entry, net income will be identical. A business has a $5,000 loan from a bank at 16% annual interest. Closing means to bring an account balance to zero. December 21, 2022. Credit (Check all that apply.). Answer: D -Current liabilities are obligations due to be paid within one year. ( c ) Is the function accurate as x40x \rightarrow 40x40 ? ), -They refer to costs that are incurred in a period, but are both unpaid and unrecorded. -The accounting cycle contains 10 steps. Debit Depreciation expense; credit Accumulated depreci, Explain what unearned revenues are by selecting the statements below which are correct. -Most operating cycles are less than one year. -They are a liability. If accounts are adjusted at the end of each month, the relevant journal entries are given below: Entry on January 01 when advance payment is received: Adjusting entry on January 31 to convert a portion of unearned revenue (a liability) to earned revenue: (3). A company borrowed $4,000 from the bank at an interest rate of 9%. 1. b) Accounts receivable will be credited for $400. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Exchange your quiz with another student's quiz. List of Excel Shortcuts Multiple select question. A work sheet is a helpful tool which may be used to help prepare financial ________. A prepaid expense (such as supplies or prepaid rent) can initially be recorded as either an expense or as an asset. What would be the journal entry on January 31 that reflects this? The adjusted trial balance is used to prepare financial statements. c) $98.63 By the end of the year, $400 had been earned. b) Any unused prepaids existing at end of period are transferred to asset accounts. b) Wages expense will be debited for $4,000. 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. -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. Place the steps in the adjusting process in the correct order in which they would be performed. 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. Which of the following accounts is considered a prepaid expense? The unadjusted trial balance contains all of the remaining accounts. a) Accounts receivable is usually increased when accruing revenues. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Debit Interest expense for $30. Journalize and post the closing entries. (Check all that apply.) a) Debit Prepaid insurance $800. They are reported on a balance sheet. d) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. . Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. e) The debit and credit column totals must balance. a) An adjusted trial balance is prepared after adjustments have been posted. a) Profit margin is also called return on sales. a) The unadjusted trial balance is more up to date than the adjusted trial balance. -Entering the titles of all accounts and their account number. (Check all that apply.). e) They are also called accounts receivable. b) Credit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 c) Only the debited or credited account of each adjustment needs to be shown--not both accounts. A company borrowed $4,000 from the bank at an interest rate of 9%. ___ 2. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Supplies would be debited for $300. Multiple choice question. -They are reported on an income statement. a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. $1,000 of cash was received in advance of performing services. Utility expense. Define "current" as it applies to assets and liabilities on a classified balance sheet. By the end of the year, $400 had been earned. Explain. (Check all that apply.). The income statement is the first financial statement prepared after preparing the adjusted trial balance. collected in advance prior a service or the product is to be delivered. Source: American Journal of Preventive Medicine 424242 (June 2012):5635702012):563-5702012):563570. Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. d) January 1. It would be credited for $700. A plant asset refers to a long-term tangible asset used to produce and sell products or services. Accumulated depreciation. Cash would be credited for $4,000. The accounting cycle is repeated each reporting period and refers to the steps taken in preparing financial statements. It can help with adjusting and closing accounts and with preparing financial statements. (Check all that apply.) Use this function. This principle is a major part of the _________ process. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. Explain the difference between the unadjusted and the adjusted trial balance. Place the steps in the adjusting process in the correct order in which they would be performed. -Notes receivable and stock and bond investments are assets that are expected to be held for more than one year. c) It is increased with a debit and is considered an asset account. For the current year, Bubbles Office Supply had earned $600 of interest on investments. d) Accounts receivable will be credited for $500. What does this trend signal? Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. (Check all that apply.). -Retained Earnings is a permanent account, but Dividends is a temporary account. Demonstrate the required adjusting entry of the business by completing the following sentence. -Record all prepaid expenses with debits to expense accounts. -The adjustment can be combined into one adjustment amount. a) The adjusted trial balance is used to prepare financial statements. Wages expense, Interest expense The next step is to insert adjustment diary entries. (Check all that apply.). Equipment They are also called accounts receivable. -The adjustment causes an increase in an asset account and an increase in a revenue account. In some cases, bankruptcy may be the only course available. the ______ rial balance is prepared by combining the adjustments in the Adjustments columns with the balances for each account listed on the _______ trial balance. (Check all that apply.). (Check all that apply. Below is an example of Amazon's consolidated statement of operations, or income statement, for the years ended December 31, 2015 - 2017. c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. You can also search the Web using the term approved credit counseling agencies. d) Debit Interest payable for $30. d) It reports amounts owed to employees and is an asset. Michelle Walker started her own consulting firm, Walker Consulting, on May 1, 2020. Supplies expense would be debited for $200. 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 . e) a 24-month insurance policy was prepaid -Long-term investments are sometimes referred to as noncurrent investments. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. Problem-14: Adjustment of accounts. Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ or a(n). Choose the statement below that explains what "closing" means. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. 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. Which of the following lists of assets would be classified as plant assets? For Printing Plus, the following is its January 2019 Income Statement. Some bankruptcy Unearned revenues refer to cash received in advance of providing a service or product. Examples of accrued expenses are wages expense and interest expense. It reports amounts owed to employees and is a liability. interest receivable Explanation: The unearned revenue is the amount i.e. Payment received, but Good or Service still hasn't been delivered. Explain what unearned revenues are by choosing the correct statement below. The Income Summary account is used during the closing process to facilitate the closing of revenue and expense accounts. The required adjusting journal entry will D) The normal balance of an expense account is a credit. (Check all that apply. Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. Credit Unearned revenues for $400. d) Debit Prepaid insurance for $400. It is a more detailed alternative to the single-step income . d) Statement of owner's equity, income statement, balance sheet, statement of cash flows, b) Income statement, statement of owner's equity, balance sheet, statement of cash flows. b) If prepaid expense was initially recorded as an asset, then assets will be higher on the balance sheet. Use a 360 day year. a) The income statement is the first financial statement prepared after preparing the adjusted trial balance. The required adjusting entry would be to debit the Salaries _____expense/payable) account and____debit/credit) the Salaries ____expense/payable/unearned) account. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. b) Debit Unearned revenue for $600. Building By the end of the period, $300 had not yet been earned. Debit Service revenue for $400. A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was initially increased for the payment. d) Accounts receivable will be debited for $400. -Plant assets are property, plant and equipment that are tangible. Which of the statements below explains the accounting cycle? Define the Salaries payable account by selecting the appropriate statement below. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. -The income statement is the first financial statement prepared after preparing the adjusted trial balance. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. service revenue, What is the date primarily used in adjusting entries? Russia has nearly doubled its revenues from selling fossil fuels to the EU during the two months of war in Ukraine, benefiting from soaring prices even . Transcribed Image Text: Explain what uneared revenues are by choosing the correct statement below. d) Record receipt with a debit to the Rent revenue account. It is a temporary account used during the closing process to summarize revenues and expenses. Determine which of the following transactions may require adjustments. -Current liabilities are usually settled by paying out current assets such as cash. Amazon refers to its revenue as "sales," which is equally as common as a term. What is the trend in the average unit price of VCRs between 1998 and 2003? Multiple select question. Depreciation expense (Check all that apply.). Illustrate your understanding of how to use the adjusted trial balance to prepare a statement of owner's equity by completing the following sentence. Unearned revenue is listed as a current liability because it's a type of debt owed to the customer. -Links accounts and adjustments to financial statements Multiple choice question. Demonstrate the required adjusting entry by completing the following sentence. Explain what unearned revenues are by selecting the statements below which are correct. a) $75 $21,000 of equipment is purchased on December 1. 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