b) Credit Prepaid insurance $800. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? The difference between income and revenues is self-explanatory. . Multiple select question. b) Accounts receivable will be debited for $500. -Accounts payable Demonstrate the required half of the adjusting entry by choosing the correct statement below. c) revenue being overstated Check each other's answers when you are finished. b) Debit cash and credit services revenue A company borrowed $4,000 from the bank at an interest rate of 9%. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. (Check all that apply.) -Profit margin is also called return on sales. Explain what unearned revenues are by selecting the statements below which are correct. Which of the following statements accurately explains how to enter adjustments? Live Tutoring. (The Unearned revenue account was increased at the time of the initial cash receipt.) a) The first day of the period Unearned Revenue. 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 By the end of the year, $400 had been earned. Unearned revenues refer to amounts owed to the company that have not yet been billed. d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. below which are correct. Thank you for reading CFIs guide to Unearned Revenue. a) Each adjustment is identified by a letter in parentheses that serves as a cross-reference to the debit and credit side of the adjustment. (Check all that apply.) The accounting cycle is repeated each reporting period and refers to the steps taken in preparing financial statements. c) Record all prepaid expenses with debits to expense accounts. Reason: Examples of accrued expenses are wages expense and interest expense. a) Credit Interest receivable for $600. For the current year, Bubbles Office Supply had earned $600 of interest on investments. In what ways have certain parties changed the United States? A business has a $5,000 loan from a bank at 16% annual interest. Cash will be debited for $900. Which of the following defines long-term liabilities? 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: As of the end of the period, $200 of supplies still remain. Explain what unearned revenues are by choosing the correct statement below. Demonstrate the required adjusting journal entry by selecting from the choices below. When preparing an income statement, revenues will always come before expenses in the presentation. Debit Depreciation expense; credit Accumulated depreciation. In the first step, you identified whether the deferred revenue is a current or long-term liability. Multiple choice question. 1. Some credit counseling agencies offer free advice; others charge a fee. Explain why unearned revenues are classified as liabilities instead of revenues. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. Multi-step income statements are one of the two income statement formats businesses can use to report their profits. e) a 24-month insurance policy was prepaid c) Credit to Salaries Payable for $500; Debit to Salaries Expense for $2,000 e) Total assets will be increased. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. $1,000 of supplies were purchased at the beginning of the month. 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? d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. -Investments in bonds, Identify the accounts below that would be classified as a long-term investment. Multiple choice question. A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. They refer to earnings which have been earned, but not yet billed. Unearned revenues refer to income reported on the income statement. The next step is to record the amount paid by the customer as a journal entry. d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. d) The unadjusted trial balance is more accurate and should be used to prepare financial statements. (Check all that apply.). Wages expense Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus, Fundamentals of Financial Management, Concise Edition, Unit 3 | Standard 3 | Basic Organization and, Social Studies Chapter 19 Study Guide - Mill. Accounting. Hub. (Check all that apply.). -Reduces the risk of errors when working with many accounts and adjustments, What are the benefits of using a work sheet? 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. It reports amounts owed to employees and is an asset. ( ) Statement of Cash Flows. McDarrel's records $500 of accrued salaries on December 31. Reason: c) Service revenue would be credited for $300. -The accounting cycle is a series of steps repeated each reporting period. When does the closing process take place? Closing means to bring an account balance to zero. a) The adjusted trial balance is used to prepare financial statements. According to Allan Johnson, what does sociological practice offer? The unadjusted trial balance contains all of the remaining accounts. -Accumulated depreciation is subtracted from its plant asset on the balance sheet. c) Debit Insurance expense $400. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? b) credit accounts payable What is an intangible asset? This principle is a major part of the _________ process. It is the top line or gross income figure . Copyrights c) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. The recognition of deferred revenue is quite common for insurance companies and software as a service (SaaS) companies. Goodwill accumulated depreciation, A depreciation adjustment would include a debit to _____ and ______ to ________. 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. Common Stock, Dividends e) The adjusted trial balance includes all accounts and balances appearing in financial statements. A link to the site is provided on the Web site for this textbook. Briefly review the history of political parties in the United States. The formula to figure out the profit margin of a company is ______ (Net income/Accounts receivable/Net sales) divided by _______ (Net income/Cash/Net sales). They are also called deferred revenues. The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. Which of the following statements is correct regarding a work sheet and the adjustment process? 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. (Check all that apply.). (Check all that apply.). An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Dazzle, Inc., purchased a new car for use in its business on January 1, 2015. d) The revenues on the income statement will be understated. credit Correct Statements They are reported on a balance sh. Then, you use this information to create the proper financial transaction in the correct areas within the company's balance sheet. a) Service revenue would be credited for $700. b) The adjusted balance is computed by taking that account's amount from the Unadjusted Trial Balance column and adding or subtracting adjustments. a) Accounts receivable would be debited for $700. Sharper declares and immediately distributes a 50% stock dividend. Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ (revenue/expense) or a(n) ______ (liability/expense). Question: Explain what unearned revenues are by selecting the statements below which are correct. Describe the effect of an accrued revenue adjustment on the income statement and the balance sheet by choosing from the statements below. Trustee Program Web site. b) Credit Interest expense for $30. (The unearned revenue account was increased at the time of the initial cash receipt.) -Depreciation is recorded through an adjusting entry. Which of the following accounts is considered a prepaid expense? 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? (Check all that apply.) Consumers may seek legal advice in filing for bankruptcy. 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. A reversal, will adjust the liability and move the money through to income, do NOT do that. -It has a life within the business greater than one year. Describe what unearned revenue is and where it is reported in financial statements. Debit Unearned revenues for $400. -Depreciation is the original cost of an asset minus any residual value and this amount is expensed over its useful life. By the end of the accounting period, the loan had been outstanding for 30 days. a list of accounts and balances after adjusting entries have been recorded and posted. f) Accounts are generally listed in the same order as listed in the chart of accounts. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. 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. $10,000 x.08 x 45/360. -Temporary accounts are reported on the income statement. -Businesses report financial information at regular intervals to ensure timeliness of data. 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. These services have not yet been paid by the customers. Describe the final step in the adjusting process. Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e., quarter). Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. Calculate the amount of interest to accrue if the loan has been outstanding for 45 days. Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. Answer: 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. b) Any unused prepaids existing at end of period are transferred to asset accounts. journalize Cash would be credited for $4,000. Closing means to transfer account balances from_______ accounts so that they will start with a ________ balance at the beginning of the next period. d) Record all prepaid expenses with credits to expense accounts. List of Excel Shortcuts e) Profit margin is the amount of revenue received on a sale. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. (Check all that apply. Which of the statements below explains the accounting cycle? Explain the difference between the unadjusted and the adjusted trial balance. 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