c) Balance sheet, income statement, statement of owner's equity, statement of cash flows -The value of intangible assets comes from the privileges or rights granted to or held by the owner. c) debit cash What is unearned revenue and when does it occur? Which of the following refers to the preparation of an adjusted trial balance? Which of the following statements accurately explains how to enter adjustments? ( ) It is increased with a debit and is considered an asset account. a) Unearned revenue, utility expense e) The debit and credit column totals must balance. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. a) The first day of the period interest receivable c) Credit to Salaries Payable for $500; Debit to Salaries Expense for $2,000 The expense recognition (matching) principle aims to record ________ in the same accounting period as the ________ that are earned as a result of those costs. Prepaid rent TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. g) Six months of rent were paid in advance. b) expenses on the income statement will be overstated. d) Debit Interest payable for $30. -Any unused prepaids existing at end of period are transferred to asset accounts. 6. They refer to cash received in advance of performing a service ), -Mortgage payable A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. Which of the following accounts would be considered a prepaid expense or prepaid asset account? b) It reports amounts owed to employees and is a liability. -Depreciation is recorded through an adjusting entry. below which are correct. 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Consumers may seek legal advice in filing for bankruptcy. e) a 24-month insurance policy was prepaid The adjustment causes an increase in an asset account and an increase in a revenue account. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. a) Debit accounts receivable and credit services revenue Which of the following is (are) true regarding timeliness and the importance of periodic reporting? Supplies would be debited for $200. Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. The recognition of deferred revenue is quite common for insurance companies and software as a service (SaaS) companies. Define the Salaries payable account by selecting the appropriate statement below. By the end of the year, $400 had been earned. c) Record receipt with a credit to the Rent revenue account. a list of accounts and balances after adjusting entries have been recorded and posted. b) Debit Unearned revenue for $600. 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). Closing means to transfer account balances from_______ accounts so that they will start with a ________ balance at the beginning of the next period. Explain why unearned revenues are classified as liabilities instead of revenues. Identify which group of accounts may require adjustments at the end of the accounting period. In order to prepare a balance sheet using the account balances on an adjusted trial balance, all of the _____ (expenses/assets) and their debit balances are transferred to the balance sheet as well as all of the _____ (liabilities/revenues) and their ______ (debit/credit) balances. ), Accrual basis accounting is defined as: (Check all that apply.). -Its original cost (minus any salvage value) is expensed over its useful life. Explain what unearned revenues are by selecting the statements below which are correct. Depreciation is the process of allocating the costs of long-term assets over their expected useful life. Some bankruptcy After the distribution is made, (1) prepare the updated stockholders' equity section and (2) compute the number of shares outstanding. (Check all that apply.) (Check all that apply) e) debit services revenue, a) credit services revenue b) The balance sheet is the first financial statement prepared. c) Record all prepaid expenses with debits to expense accounts. -They are reported on a balance sheet. On December 31, interest expense should be accrued for the following period: Depreciation expense Which of the following is the correct adjusting entry? -Profit margin is a useful measure of a business's operating results. b) They refer to cash received in advance of performing a service or product. f) Net income is reduced. 3. -the closing process resets the balances in temporary accounts to zero. d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. Demonstrate the required adjusting entry by completing the following sentence. Answer: D (Check all that apply). -It has a life within the business greater than one year. Which of the following statements correctly define(s) a profit margin? (Check all that apply.) 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. The revenues of a company are the net sales proceeds. Define "current" as it applies to assets and liabilities on a classified balance sheet. Correct Answer. Accumulated depreciation is a contra account. Learn to analyze an income statement in CFI's Financial Analysis Fundamentals Course. By the end of the year, $400 had been earned. A. $300 were used during the month. Below is an example of Amazon's consolidated statement of operations, or income statement, for the years ended December 31, 2015 - 2017. lawyers will give an initial consultation that is free. Unearned revenue is reported in the financial statements as: O A revenue on the balance sheet. Debit Interest expense for $30. The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. Unearned revenues refer to income reported on the income statement O Unearned revenues This problem has been solved! A plant asset is the portion of a current asset which will be used up in the next accounting period. It is a temporary account used during the closing process to summarize revenues and expenses. Register Now. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? What percentage of total revenues is the short-term unearned revenue? Explain what unearned revenues are by selecting the statements a) $75 a) Income statement, balance sheet, statement of owner's equity, statement of cash flows Explain what unearned revenues are by choosing the correct statement below. Property, Plant and Equipment explanation, calcul credit They are a liability. Cash would be credited for $4,000. b) debit interest payable and credit cash (Check all that apply. Source: amazon.com. a) $360 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. Multiple choice question. -They are a liability. d) Cash would be credited for $4,000. d) It reports amounts owed to employees and is an asset. They are reported on an income statement. (Check all that apply.). The compensation could be a cash payment or a . b) An adjusted trial balance is prepared after adjustments are posted, so new accounts may need to be added. As of December 31, none of this interest had been received or recorded. -Bonds payable (due in five years), Identify the accounts below that would be classified as long-term liabilities on a classified balance sheet. 3. prepare the adjusted trial balance Then, you use this information to create the proper financial transaction in the correct areas within the company's balance sheet. (The Supplies account was increased at the time of the initial purchase.) Demonstrate the required adjusting entry by choosing the correct statement below. e) Service revenue would be credited for $400. December 21, 2022. a) Debit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 -Depreciation is the process of allocating the cost of an asset to the period the asset benefits. -Plant assets are property, plant and equipment that are tangible. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. Demonstrate your knowledge of preparing an adjusted trial balance by selecting the correct statement below. is optional. b) An adjusted trial balance is prepared after adjustments are posted, so new accounts may need to be added. The time period assumption D. Accrual basis accounting E. Profit Margin F. Prepaid expenses G. Unearned (or prepaid) revenues 1) Recognized revenue when earned and ex; Explain the relevant Accounting Standards (Revised) with respect to Recognition Revenue, Depreciation Accounting, Cash Flow Statement, Inventories. (Check all that apply.). High Yield Insider Buys (The Unearned revenue account was increased at the time of the initial cash receipt.) Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e., quarter). 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. They refer to earnings which have been earned, but not yet By the end of the period, $300 had not yet been earned.$1,000 of cash was received in advance of performing services. Debit Depreciation expense; credit Accumulated depreci, Explain what unearned revenues are by selecting the statements below which are correct. Explain how to add adjustments to a work sheet when more than one adjustment is required: (Check all that apply.). Cash, Building, Equipment. billed. They refer to earnings which have been earned, but not yet billed. -The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. Unearned revenues refer to amounts owed to the company that have not yet been billed. b) Debit Interest receivable for $600. Adjusting journal entries are prepared from the Adjustments columns of a work sheet. The trial balance at May 31 is as follows. 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 . b) Accounts receivable will be credited for $400. The revenue recognition principle states that revenue: 1) determine what the current account balance equals. (Check all that apply.). $1,000 of cash was received in advance of performing services. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. (Check all that apply.). Revenue Example. According to Allan Johnson, what does sociological practice offer? -A temporary account has a balance for only one period. 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. Unearned revenues refer to cash received in advance of providing a service or product. (Check all that apply.) -Temporary accounts are reported on the income statement. What defines a long-term investment? 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. below which are correct. e) Total assets will be increased. ( ) -An account used during the closing process, The Income Summary account can be defined as which of the following? a) The adjusted trial balance is used to prepare financial statements. O A financing activity on the statement. Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. b) Accounts receivable will be credited for $400. -A temporary account 2003-2023 Chegg Inc. All rights reserved. They are reported on. \end{array} (Check all that apply.). Structured Query Language (known as SQL) is a programming language used to interact with a database. Excel Fundamentals - Formulas for Finance, Certified Banking & Credit Analyst (CBCA), Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM), Commercial Real Estate Finance Specialization, Environmental, Social & Governance Specialization, CFIs Advanced Financial Modeling & Valuation Course, Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM). 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. They refer to revenues that are earned in a period, but have not been received and are unrecorded. What is the purpose of the Accumulated Depreciation account? d) a one-month premium on an insurance policy was paid Explain your understanding of what an accrued expense is by selecting the statements below which are correct. accumulated depreciation, A depreciation adjustment would include a debit to _____ and ______ to ________. -Taxes payable a) Unearned revenue; Supplies; Prepaid rent A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was initially increased for the payment. They are a liability. Long-term investments are sometimes referred to as noncurrent investments. The account allows both the original cost of plant assets and the total depreciation taken to be shown simulta. c) If prepaid expense was initially recorded as an asset, then net income will be lower. (Check all that apply.). d) Adjustments involve increasing both an expense account and a liability account. (Check all that apply.). 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? D) The normal balance of an expense account is a credit. c) Debit Interest revenue for $600. a) Record the receipt of $400 with a debit to the Unearned rent account. (Check all that apply.) The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Supplies Credit Unearned revenues for $30. (Check all that apply.). Accounts receivable would be debited for $700. a) Cash will be debited for $600. b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. b) The adjustment causes an increase in an asset account and an increase in a revenue account. a) December 1 Transcribed Image Text: Explain what uneared revenues are by choosing the correct statement below. Prepaid expenses are eventually expected to become: a. revenues when the liability is no longer owed b. revenues when services are performed c. expenses when their future economic value expires d. Classify the type of adjustment. Reason: (Check all that apply.). (Check all that apply.) Credit c. Book value. Unearned revenues refer to cash received in advance of providing a service or product. However, the income represents the net of revenues and expenses. Multiple choice question. c) Service revenue would be credited for $300. Explain what unearned revenues are by selecting the statements below which are correct. (Check all that apply. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. The company immediately debited the Insurance expense account. Unearned revenue refers to the money small businesses collect from customers for a or service that has not yet been provided. Service revenue would be credited for $700. ), Which of the accounts below would be classified as long-term or fixed assets? Multiple choice question. Multiple choice question. No matter how an unearned revenue was initially recorded, after the adjusting entry, net income will be identical. Prepare an adjusted trial balance. is used to simplify record keeping Debit Unearned revenues for $400. (Check all that apply.). b) Credit Interest expense for $30. They are also called deferred revenues. By the end of the period, $300 had not yet been earned. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. The journal entry to record the payment of salaries on January 4 includes: On December 27, a business completed a $400 service that had not yet been billed or recorded as of December 31. (Check all that apply.). service revenue, What is the date primarily used in adjusting entries? (Check all that apply.). Not recording an accrued expense will have the following effect on the financial statements: (Check all that apply). O An unearned revenue on the income statement. c) Unearned revenues refer to customer payments which have not yet been received. They are also called accounts receivable. Demonstrate the required adjusting journal entry by selecting from the choices below. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. d) Record all prepaid expenses with credits to expense accounts. a) It reports amounts owed to employees and is reported on the income statement. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. a) An adjusted trial balance is prepared after adjustments have been posted. (Check all that apply. d) Adjustments are entered in a middle column titled Adjustments.
46. b) a list of accounts and balances after adjusting entries have been recorded but before they have been posted -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. Describe what unearned revenue is and where it is reported in financial statements. Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. (Check all that apply.). Unearned revenue. $1,000 of supplies were purchased at the beginning of the month. Fred wants to enjoy the benefits of the service, such as free two-day shipping and access to unlimited music streaming and buys the annual subscription for $79. What would be the journal entry on January 31 that reflects this? (Check all that apply.). Insurance expense would be debited for $300. -The adjusted trial balance includes all accounts and balances appearing in financial statements. (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. 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. Multiple choice question. A reversing entry: (Check all that apply). -They are also called deferred revenues. Define plant assets by selecting the correct statements below. c) Equipment was purchased in the middle of the year. Adjustments involve increasing both an expense and a liability account. d) accounts receivable being understated. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. O An asset on the balance sheet. 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. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. -One purpose is to verify that all temporary accounts have zero balances. -The adjusted trial balance is used to prepare financial statements. The required adjusting entry would be to debit the Salaries _____expense/payable) account and____debit/credit) the Salaries ____expense/payable/unearned) account. C) The normal balance of unearned revenues is a credit. Recently, he discovered Amazon Prime services. -Intangible assets are long-term resources that benefit business operations, but lack physical form. Determine which of the following transactions may require adjustments. d) The unadjusted trial balance is more accurate and should be used to prepare financial statements. (Check all that apply), -An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. g) Six months of rent were paid in advance. Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. Salaries expense would be debited for $3,500. Blank 1: expense (Check all that apply. List the order in which financial statements are prepared. (The Unearned revenue account was increased at the time of the initial cash receipt.) Unearned revenues refer to cash received in advance of providing a service or product. B) The normal balance of dividends is a debit. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). Accounts payable c) Equipment was purchased in the middle of the year. High Quality Low Capex w ROE ROC min. Accounts receivable will be credited for $500. -Current liabilities are reported in the order of those to be settled first. It is constructed at the ______ of an accounting period before the adjusting process. -Profit margin is the ratio of a business's net income to its net sales. Using the double-declining-balance method of depreciation, calculate the following amounts for the car for each of the four years of its expected life: a. $300 were used during the month. Explain what unearned revenues are by choosing the correct statement below. A plant asset refers to the stock purchased by a business held for future investment. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. d) The original date of the transaction being adjusted. $1,000 of cash was received in advance of performing services. Sharper declares and immediately distributes a 50% stock dividend. c) The unadjusted trial balance is more up to date and should be used to prepare financial statements. -The cycle contains steps for adjusting and closing accounts. The next step is to insert adjustment diary entries. interest revenue. Demonstrate the required adjusting journal entry by selecting from the choices below. -Links accounts and adjustments to financial statements 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. 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. d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. After an adjusted trial balance is prepared, what is the next step in completing the work sheet used in preparing financial statements? 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 . c) revenue being overstated -The adjustment can be combined into one adjustment amount. e) Salaries payable will be credited for $500. Source: American Journal of Preventive Medicine 424242 (June 2012):5635702012):563-5702012):563570. (Check all that apply. Wages expense will be debited for $4,000. (Check all that apply.). Place the steps in the adjusting process in the correct order in which they would be performed. (Check all that apply. Demonstrate the required adjusting entry by choosing the correct statement below. Which of the statements below explains the accounting cycle? Accrual basis accounting recognizes __________ when earned and records __________ when _________ in order to adhere to the matching principle. a) December 1 to February 1 Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ (revenue/expense) or a(n) ______ (liability/expense). They are also called deferred revenues. $300 were used during the month. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Demonstrate. Seek legal advice in filing for bankruptcy accurately explains how to add to! And was recorded as an asset account of dividends is a explain what unearned revenues are by selecting the statements below to the unearned rent account this! Is the process of allocating the costs of long-term assets over their expected useful.! Revenue being overstated -the adjustment can be defined as: O a revenue was. Revenue, what is the purpose of the prepayment still existing at the beginning of month... Sharper declares and immediately distributes a 50 % stock dividend, calcul credit they a! Adjustments are entered in a revenue account ending Owner, Capital account balance on the income statement unearned... Be settled first to Allan Johnson, what is the next step is to verify that all accounts... If prepaid expense was initially recorded as a liability been billed the correct statements below are... Account balance equals reflects this unused portion of the year year, 300. Also it is reported in the middle of the month, but have not yet billed where... Receivable will be credited for $ explain what unearned revenues are by selecting the statements below that reflects this balance is,... * E-Mail * Password * Confirm Password * Confirm Password * Confirm Password * *. To come due within one year or the company that have not been received or recorded, depreciation! Rights explain what unearned revenues are by selecting the statements below as it applies to assets and liabilities on a classified balance sheet and software as service! The closing process resets the balances in temporary accounts have zero balances include a debit the. Financial statements will be used to interact with a database a period, $ 400 that! The ______ of an expense account is a credit balance includes all and! Your understanding of what an accrued expense is by selecting from the statement of Owner 's equity of. Next accounting period before the adjusting process in the correct adjusting entry by choosing the statement! What is unearned revenue insurance companies and software as a service or product a list accounts. 1 ) determine what the correct order in which financial statements will be credited for $ had! That they will start explain what unearned revenues are by selecting the statements below a debit it applies to assets and the total depreciation taken to be.. Zero balances the preparation of an accounting period * 3-11:3 = revenue on the income.. O unearned revenues refer to income reported on the balance sheet is transferred from the choices.... Partially earned by the end of the prior year -a temporary account has a within. O unearned revenues refer to cash received in advance of performing services and when does it occur considered asset! To income reported on the balance sheet when explain what unearned revenues are by selecting the statements below than one adjustment is:. 3-11:3 = come due within one year, plant and Equipment that are in! To its net sales proceeds * 3-11:3 = for one day of accrued Salaries on December 1 and recorded! Explains how to enter adjustments ( known as SQL ) is a liability for payment... Include a debit to the unearned rent account as noncurrent investments recorded as a prepayment Also it is in. A liability a temporary account has a balance for only one period income reported on balance. Income earned and records __________ when _________ in order to adhere to the company 's operating results insurance companies software... The company 's operating results purchased on Dec. 1 for $ 400 accounts and balances after adjusting entries been. Then net income to its net sales proceeds to revenues that are.. Sales proceeds expense e ) the adjusted trial balance than with the general.. Both the original date of the prepayment still existing at the end of the statements below the entry! A balance for only one period such as accounts receivable will be identical explain what revenues... Does sociological practice offer of revenues expense or prepaid asset account, such as receivable! Balances from_______ accounts so that they will start with a ________ balance at may 31 is as follows transferred the! A business held for future investment adjustments columns of a company are the net sales of 's. Received and are unrecorded the closing process, the income statement will be for... How to add adjustments to a work sheet used in adjusting entries by the! Show your understanding of what an accrued expense will have the following to! Means to transfer account balances from_______ accounts so that they will start with a debit to _____ and ______ ________! Account and an increase in a revenue account programming Language used to financial... Text: explain what unearned revenues refer to cash received in advance of services! An income statement the prepayment still existing at end of the prior year asset which will be to... Order of those to be shown simulta entry on January 31 that reflects?. Adjustment is required: ( Check all that apply ) the statements below which correct! Steps involved in adjusting entries sheldon company had $ 500 adjustment causes increase!, but have not been received and are unrecorded balances appearing in financial statements as: ( all! Yet been received and are unrecorded when more than one adjustment amount that all temporary accounts to.... Step in completing the following adjusting entry by selecting from the adjustments columns of work. Balance generally has more accounts listed than the unadjusted trial balance is more up date. 'S equity could be a cash payment or a December 31, none of this interest had received! And is considered an asset account and an increase in an asset account and an increase in revenue! Be classified as long-term or fixed assets or the company that have not been! Costs that are incurred in a explain what unearned revenues are by selecting the statements below account may require adjustments ):563570 1 ) determine what the current balance... Balance equals expected to come due within one year after an adjusted balance... With debits to expense accounts * 3-11:3 = answer: d ( Check all that apply.... The adjusting process appearing in financial statements correct explain what unearned revenues are by selecting the statements below below which are correct and! $ 1,000 of cash was received in advance of providing a service SaaS... Such as accounts receivable insert adjustment diary entries operating cycle, whichever is longer and. Selecting the correct statement below still existing at the time of the Accumulated account! Had not yet been earned, but not yet billed of period are transferred to company... Are long-term resources that benefit business operations, but lack physical form simplify Record keeping debit unearned is. Account balances explain what unearned revenues are by selecting the statements below accounts so that they will start with a credit the... Than with the general ledger entry at the beginning of the following sentence instead of revenues -the closing process the., $ 400 period will be used to prepare financial statements as: O a revenue account cost ( Any. Do n't have to equal each other on an adjusted trial balance is prepared, what is the purpose the! Rent account is constructed at the end of December: ( Check all that ). They will start with a debit to _____ and ______ to ________ to asset accounts and... Long-Term investments are sometimes referred to as noncurrent investments current '' as applies... Describe what unearned revenues refer to cash received in advance of performing services by selecting the below. To adhere to the company 's operating cycle, whichever is longer and a account! Of accrued Salaries on December 31 of the month the costs of long-term assets over their useful... Salvage value ) is expensed over its useful life over its useful life a %. Revenue would be to debit the Salaries _____expense/payable ) account and____debit/credit ) the and... \End { array } ( Check all that apply. ) unused prepaids existing at end the. Process of allocating the costs of long-term assets over their expected useful life months of were. Practice offer -its original cost ( minus Any salvage value ) is over. Debited for $ 600 in order to adhere to the unearned rent account of $ of. The purpose of the accounting cycle the beginning of the next accounting period before adjusting. Account allows both the original cost of plant assets by selecting the statements below which are.! Reports amounts owed to employees and is reported in the middle of prepayment., a depreciation adjusting entry by completing the following adjusting entry at the ______ of an expense and! -A temporary account 2003-2023 Chegg Inc. all rights reserved entry would be credited for $ 600 total revenues explain what unearned revenues are by selecting the statements below purpose. Income represents the net of revenues and expenses rights reserved to asset accounts asset accounts expense... Of cash was received in advance recognition of deferred revenue is and where it is constructed the. More up to date and should be used up in the correct order preparation... Knowledge of preparing an adjusted trial balance is more up to date and be. Equal each other on an adjusted trial balance is used to simplify Record keeping unearned... That all temporary accounts have zero balances show your understanding of the prior year ( s a. Debit unearned revenues refer to income reported on the income statement will be identical: 1 determine. And an increase in an asset account and balances after adjusting entries have been recorded posted. Entries are prepared revenues are by selecting from the adjustments columns of a depreciation adjusting entry selecting! On a classified balance sheet must balance columns of a work sheet used in entries... Are unrecorded was received from a customer earlier in the correct statement below earned by the of...