(Check all that apply.). (Check all that apply.). 46. d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. (Check all that apply.) c) a list of accounts and balances after adjusting entries have been recorded and posted, c) a list of accounts and balances after adjusting entries have been recorded and posted, Recall the order in which financial statements are prepared. a) Rent was paid for the month. -Notes receivable due in 2 years Let's take a closer look to understand how revenue works for a very large public company. \text{Total stockholders' equity}&\underline{\underline{\text{\$1,360,000}}}\\ (Check all that apply.) (Check all that apply.) -Depreciation is recorded through an adjusting entry. Any Date Prepaid Insurance (Costof insurance policy) Cash By the end of the year, $400 had been earned. c) Debit Interest revenue for $600. Statement of Owner's Equity (Retained Earnings) a) The first day of the period They refer to earnings which have been earned, but not yet a) The adjusted trial balance is used to prepare financial statements. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Multiple select question. b) The balance sheet is the first financial statement prepared. (Check all that apply. The same is to be shown as the liability on the balance sheet 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. a) It reports amounts owed to employees and is reported on the income statement. journalize An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. a) Debit Unearned revenues for $400. (Check all that apply.). b) $100 c) debit interest expense and credit interest payable 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)? They refer to revenues that are earned in a period, but have not been received and are unrecorded. Transcribed Image Text: K Randal's Service Company began operations on January 1, 2025. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. Correct Answer. -The adjustment can be squeezed in on one line of the trial balance. (Check all that apply.) (Check all that apply.). 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 accounts receivable. c) Debit Unearned revenues for $600. Unearned revenues refer to cash received in advance of providing a service or product. -Intangible assets are long-term resources that benefit business operations, but lack physical form. a) $75 (Check all that apply. c) Service revenue would be credited for $200. d) accounts receivable being understated, a) revenue being understated Learn to analyze an income statement in CFI's Financial Analysis Fundamentals Course. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. (The Unearned revenue, account was increased at the time of the initial cash receipt.) Demonstrate the required journal entry on January 3 by selecting from the choices below. -It has a life within the business greater than one year. Which statements below are true regarding permanent and temporary accounts? 2. journalize and post adjusting entries (Check all that apply.) c) Debit accounts receivable and credit cash, a) Debit accounts receivable and credit services revenue. Blank 1: expense Multiple select question. -The adjusted trial balance includes all accounts and balances appearing in financial statements. Unearned revenue would be debited for $300. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Explain what unearned revenues are by choosing the correct statement below. a) They refer to costs that are incurred in a period, but are both unpaid and unrecorded. -Accumulated depreciation is a contra account. The chart of accounts used by Norton Printing Company is listed below. (Check all that apply.) 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. a) An adjusted trial balance is prepared after adjustments have been posted. -One purpose is to verify that total debits equal total credit for permanent accounts. The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. b) remove the unearned amount to a liability account c) Record receipt with a credit to the Rent revenue account. As of the end of the period, $200 of supplies still remain. By the end, of the period, $300 had not yet been earned. a) Profit margin is also called return on sales. Accounts receivable would be debited for $700. d) Debit Service revenue for $400. A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. Supplies expense would be debited for $300. The required adjusting journal entry on December 31 includes a: (Check all that apply.). After the distribution is made, (1) prepare the updated stockholders' equity section and (2) compute the number of shares outstanding. Place the steps in the adjusting process in the correct order in which they would be performed. Demonstrate the required adjusting entry by choosing the correct statement below. c) They refer to earnings which have been earned, but not yet billed. In some cases, bankruptcy may be the only course available. (Check all that apply.) 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. d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. Dazzle, Inc., purchased a new car for use in its business on January 1, 2015. c) Service revenue would be credited for $300. -Its original cost (minus any salvage value) is expensed over its useful life. Use a 360 day year. Explain what unearned revenues are by choosing the correct statement below. (a) prepaid expense (b) unearned revenue (c) accrued revenue (d) accrued expense c) Cash; Notes receivable; Land, a) Unearned revenue; Supplies; Prepaid rent. -Plant assets are property, plant and equipment that are tangible. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Accumulated depreciation. Multiple choice question. b) An adjusted trial balance has one debit column and one credit column. (Check all that apply.). e) Profit margin is the amount of revenue received on a sale. Accounts receivable will be credited for $400. The income statement is the first financial statement prepared after preparing the adjusted trial balance. Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. -Helps in the preparation of financial statements c) Record all prepaid expenses with debits to expense accounts. c) debit cash Six months of rent were paid in advance. c) $98.63 d) debit interest expense and credit cash, c) debit interest expense and credit interest payable, StoryBook Company provided services to several customers during the month of December. By the end of the period, $300 had not yet been earned. c) Equipment was purchased in the middle of the year. The payment amount of $27,000 will be recorded under cash,increasing the assets, and under unearned revenue, increasing long-term liabilities. Enter the unadjusted trial balance. service revenue, What is the date primarily used in adjusting entries? The trial balance columns of the worksheet for Riverbed Company at June 30, 2019, are as follows. -Profit margin is a useful measure of a business's operating results. 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. c) Profit margin is a useful measure of a business's operating results. e) a 24-month insurance policy was prepaid Sort adjusted trial balance amounts to the financial statement columns. S(x)=0.00850x2+1.25x+0.8540.264x2+10.7x66.9. $300 were used during the month. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. Credit Initially, the full amount will be recognized as unearned revenue on Amazons balance sheet. a) An asset will be increased. (Check all that apply.). Unearned revenues refer to income reported on the income statement. Reason: The revenues of a company are the net sales proceeds. Explain what unearned revenues are by selecting the statements The final step is to create an adjusting journal entry to get from step 1 to step 2. List of Excel Shortcuts Describe the final step in the adjusting process. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. c) $200 They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Accumulated depreciation is a contra account. 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. Journalize and post the closing entries. It reports amounts owed to employees and is reported on the income statement. McDarrel's records $500 of accrued salaries on December 31. The entire $3,000 goes into the Unearned Revenue account because you've been paid for work you have not yet completed. Supplies expense would be credited for $300. Adjusting journal entries are prepared from the Adjustments columns of a work sheet. (Check all that apply). Below is an example of Amazon's 2017 income statement. (Check all that apply.) Unearned revenues refer to cash received in advance of providing a service or product. Wages expense a) Cash will be debited for $600. The recognition of deferred revenue is quite common for insurance companies and software as a service (SaaS) companies. The process is simple in cash basis . -Plant assets are difficult to convert to cash quickly. d) debit accounts receivable It is the top line or gross income figure . Franchise, Identify the accounts below that would be classified as intangible assets on a classified balance sheet. (The Supplies account was increased at the time of the initial purchase.) c) If prepaid expense was initially recorded as an asset, then net income will be lower. c) Debit Insurance expense $400. Salaries expense would be debited for $3,500. Cash will be debited for $900. What is the purpose of the Accumulated Depreciation account? Register Now. a) Record all prepaid expenses with credits to liability accounts. On December 28, I. M. Greasy, Catering completed $600 of catering services. prepare financial statements. $1,000 of cash was received in advance of performing services. 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. Demonstrate the required journal entry on January 3 by selecting from the choices below. They refer to cash received in advance of performing a service or product. e) The debit and credit column totals must balance. The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. 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. 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). (Check all that apply.). Explain what unearned revenues are by choosing the correct statement below A process regulated balance quizlet What is the purpose of the adjusted verification budget?, The adjusted verification balance sheet is not part of the budget rather, it is one. 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. Which of the following is the correct adjusting entry? c) Only the debited or credited account of each adjustment needs to be shown--not both accounts. c) Debit Accounts receivable for $600. Generally, unearned revenues are classified as short-term liabilities because the obligation is typically fulfilled within a period of less than a year. ), Which of the accounts below would be classified as long-term or fixed assets? a. Accounts receivable will be credited for $500. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. Debit Depreciation expense; credit Accumulated depreci, Explain what unearned revenues are by selecting the statements below which are correct. They refer to cash received in advance of performing a service or product. e) Total assets will be increased. Use this function. 3. prepare an adjusted trial balance a) Debit Prepaid insurance $800. Which of the following statements accurately explains how to enter adjustments? was recorded as a liability. c) It is increased with a debit and is considered an asset account. a) remove the earned amount to a revenue account Supplies b) Accounts receivable will be credited for $400. (Check all that apply.) Debit Interest expense for $30. d) $800. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. Calculate the amount of interest to accrue if the loan has been outstanding for 90 days. Image from Amazon Balance Sheet. 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. Cash 2,000 Accounts Receivable 2,700 Supplies 1,900 Accounts Payable 1,000 Unearned Service Revenue 380 Common Stock 2,300 Service Revenue 3,600 Salaries and Wages Expense 510 Miscellaneous Expense . -Plant assets are equipment and other assets that have a life greater than one year. For Amazon, Freds payment ($79) is unearned revenue since the company receives the full payment in advance while none of the services have been provided to Fred yet. Sharper declares and immediately distributes a 50% stock dividend. -Current liabilities are reported in the order of those to be settled first. Cash \text{Paid-in capital in excess of par value, common stock}&\text{200,000}\\ Which of the following statements about the Accumulated depreciation account is (are) correct? Which of the following lists contains only temporary accounts? (Check all that apply.) d) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. The following table shows the percent of obese Americans who are severely obese for selected years from 199019901990 and projected to 203020302030. (Check all that apply.) what would be a logical or realistic accounting period for a business that is creating financial statements? Trustee Program Web site. 2003-2023 Chegg Inc. All rights reserved. b) Any unused prepaids existing at end of period are transferred to asset accounts. 3. Describe the final step in the adjusting process. Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. They are reported on a balance sheet. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ or a(n). The rationale behind this is that despite the company receiving payment from a customer, it still owes the delivery of a product or service. Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. Define "current" as it applies to assets and liabilities on a classified balance sheet. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. Which of the following statements about the Accumulated depreciation account is (are) correct? Which of the following is (are) true regarding timeliness and the importance of periodic reporting? (Check all that apply. Review the statements below and select the items that are correct regarding the operating cycle for a business. recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue. B. Contra asset is an account shown as an addition to the asset. Remember revenue is only recognized if a service or product is delivered, a refund nulls recognition. -Equipment was purchased in the middle of the year. Which of the following is the proper adjusting entry? ), $1,000 of supplies were purchased at the beginning of the month. Utility expense. Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. They are reported on. By the end of the year, $400 had been earned. -They refer to cash received in advance of performing a service or product. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. -Businesses report financial information at regular intervals to ensure timeliness of data. As of December 31, none of this interest had been received or recorded. -The adjustment causes an increase in an asset account and an increase in a revenue account. (Check all that apply.). In the first step, you identified whether the deferred revenue is a current or long-term liability. interest receivable -Most companies use a one-year period or operating cycle in deciding which assets and liabilities are current. Obesity (BMI\mathrm{BMI}BMI 30\geq 3030 ) is a serious problem in the United States and is expected to get worse. -It is reported on the balance sheet. 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.
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