), $1,000 of supplies were purchased at the beginning of the month. Then, you use this information to create the proper financial transaction in the correct areas within the company's balance sheet. ), Which of the accounts below would be classified as long-term or fixed assets? The following Trial Balance was prepared on December 31, 2025. Accrual basis accounting recognizes __________ when earned and records __________ when _________ in order to adhere to the matching principle. The journal entry on February 1 is? O An unearned revenue on the income statement. f) They are reported on an income statement. or product. As of December 31, none of this interest had been received or recorded. Unearned revenues refer to income reported on the income statement. Explain what unearned revenues are by choosing the correct statement below. -Depreciation is the process of allocating the cost of an asset to the period the asset benefits. a 24-month insurance policy was prepaid 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. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). In this free session, the client explains her or his situation, and the attorney evaluates the options. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. Business Accounting Choose the correct statement below: A. Unearned income is income earned and already collected. A post-closing trial balance is a list of _______ accounts and their balances from the ________ all _________ entries have been journalized and posted. Unearned revenues refer to customer payments which have not yet been received. (Check all that apply.) What defines a long-term investment? Commonstock-$10parvalue,50,000sharesissuedandoutstanding$500,000Paid-incapitalinexcessofparvalue,commonstock200,000Retainedearnings660,000Totalstockholdersequity$1,360,000\begin{array}{lr} Examples of accrued expenses are wages expense and interest expense. Explain what unearned revenues are by selecting the statements -The adjusted trial balance is used to prepare financial statements. \text{Total stockholders' equity}&\underline{\underline{\text{\$1,360,000}}}\\ Calculate the amount of interest to accrue if the loan has been outstanding for 45 days. 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. Multiple choice question. a) $360 Credit Interest expense for $30. The next step is to insert adjustment diary entries. d) Adjustments involve increasing both an expense and a liability account. After the distribution is made, (1) prepare the updated stockholders' equity section and (2) compute the number of shares outstanding. A revenue not yet recognized, collected in advanc; Generally accepted accounting principles require the use of accruals and deferrals in the determination of income. -It is reported on the balance sheet. List the order in which financial statements are prepared. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? It can help with adjusting and closing accounts and with preparing financial statements. c) Service revenue would be credited for $200. accumulated depreciation, A depreciation adjustment would include a debit to _____ and ______ to ________. below which are correct. -Record all prepaid expenses with debits to expense accounts. Since $300 has not been earned, it means that $700 has been earned. 2. journalize and post adjusting entries On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. c) Service revenue would be credited for $200. b) Any unused prepaids existing at end of period are transferred to asset accounts. The same is to be shown as the liability on the balance sheet Review the key term below. 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. The final step is to create an adjusting journal entry to get from step 1 to step 2. Salaries payable will be credited for $500. Patent Adjusting journal entries are prepared from the Adjustments columns of a work sheet. As of December 31, the customer had not been billed nor had the transaction been recorded. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. \text{Paid-in capital in excess of par value, common stock}&\text{200,000}\\ -An account used during the closing process, The Income Summary account can be defined as which of the following? What would be the journal entry on January 31 that reflects this? They are a liability. (The Unearned revenue account was increased at the time of the initial cash receipt.) They refer to earnings which have been earned, but not yet billed. 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. WALKER CONSULTING Trial Balance May 31, 2020 Account Number Debit Credit Cash $4,400 Accounts Receivable 6,200 Supplies Prepaid Insurance 1.900 4,800 12,000 Equipment Accounts Payable $ 4.800 Unearned Service Revenue Owner's Capital 2,100 19,700 7.500 Service Revenue . By the end of the period, $300 had not yet been earned. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Multiple select question. c) Salaries payable will be debited for $500. c) Cash; Notes receivable; Land, a) Unearned revenue; Supplies; Prepaid rent. Adjustments involve increasing both an expense and a liability account. b) Accounts receivable will be debited for $500. TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. (a) Find limx40S(x)\lim _{x \rightarrow 40} S(x)limx40S(x), if it exists. By the end of the accounting period, the loan had been outstanding for 30 days. The recognition of deferred revenue is quite common for insurance companies and software as a service (SaaS) companies. adjusting entry should include by choosing the. Unearned revenues refer to amounts owed to the company that have not yet been billed. -They refer to revenues that are earned in a period, but have not been received and are unrecorded. (Check all that apply. B. Contra asset is an account shown as an addition to the asset. 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 . 5b. Unearned revenues refer to customer payments which have not yet been received. Explain what unearned revenues are by selecting the statements below which are correct. 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. Current items are those expected to come due within one year or the company's operating cycle, whichever is longer. Explain what unearned revenues are by selecting the statements c) revenue being overstated Which of the following statements correctly define(s) a profit margin? b) Profit margin is the ratio of a business's net income to its accounts receivables. Long-term investments are sometimes referred to as noncurrent investments. They refer to revenues that are earned in a period, but have not been received and are unrecorded. b) Credit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 b) If prepaid expense was initially recorded as an asset, then assets will be higher on the balance sheet. a) Credit Unearned revenues for $30. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. b) An adjusted trial balance is prepared after adjustments are posted, so new accounts may need to be added. Unearned revenue would be debited for $700. C) The normal balance of unearned revenues is a credit. $300 were used during the month. (Check all that apply.). ), -Land held for future expansion Smartbook: Chapter 4 Completing the Accountin, Quiz 5 Biology what we have covered so far, Commonstock-$10parvalue,50,000sharesissuedandoutstanding, Paid-incapitalinexcessofparvalue,commonstock, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. 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: (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. Which of the statements below is correct regarding the difference between a temporary account and a permanent account? f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. -Shows the effects of what-if transactions b) Debit Interest receivable for $600. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. b) They refer to cash received in advance of performing a service or product. 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 Salaries expense would be debited for $3,500. An alternative to recording a prepayment of revenue initially as a revenue as opposed to a liability requires a period-end adjusting entry to: Explanation: The unearned revenue is the amount i.e. a) December 1 -Depreciation is recognized at the end of an accounting period. Sharper declares and immediately distributes a 50% stock dividend. -Permanent accounts are reported on the balance sheet. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Cash received from a customer for unearned subscription revenue can initially be recorded as either a(n) ______ or a(n). By the end of the period, $300 had not yet been earned. By the end of the year, $400 had been earned. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. b) Wages expense, interest expense (The Unearned revenue account was increased at the time of the initial cash receipt.) -Entering the titles of all accounts and their account number. c) They refer to earnings which have been earned but not yet billed. However, the income represents the net of revenues and expenses. S(x)=0.00850x2+1.25x+0.8540.264x2+10.7x66.9. Describe the final step in the adjusting process. a) Record the receipt of $400 with a debit to the Unearned rent account. -Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. \text{Common stock-\$10 par value, 50,000 shares issued and outstanding}&\text{\$\hspace{7pt}500,000}\\ 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. 2. enter adjustments Explain your understanding of what an accrued expense is by selecting the statements below which are correct. 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) Debit Unearned revenues for $600. Unearned revenue, Utility expense ), 1. enter the unadjusted trial balance . Debit Unearned revenues for $600. -Plant assets are equipment and other assets that have a life greater than one year. Chimney's customers have not yet been billed. Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. -The adjustment can be squeezed in on one line of the trial balance. Insurance expense would be debited for $300. d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. Supplies expense would be credited for $300. b) Credit Interest expense for $30. d) Record receipt with a debit to the Rent revenue account. prepare an adjusted trail balance Correct Answer. Debit Depreciation expense; credit Accumulated depreciation. The required adjusting journal entry on December 31 includes a: (Check all that apply.). c) $98.63 Sort adjusted trial balance amounts to the financial statement columns. They are also called accounts receivable. (Check all that apply. Multiple choice question. d) The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. (Income Summary is account #33 in the chart of accounts.) b) The balance sheet is the first financial statement prepared. 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 . apply.) Explain your understanding of what an accrued expense is by selecting the statements below which are correct. b. -They are reported on a balance sheet. (Check all that apply. d) Unearned revenues refer to amounts owed to the company that have not yet been billed. Revenue is the amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. the ______ rial balance is prepared by combining the adjustments in the Adjustments columns with the balances for each account listed on the _______ trial balance. Credit Unearned revenues for $30. What would be the journal entry on January 31 that reflects this? 5a. -Six months of rent were paid in advance. b) Any unused portion of the prepayment still existing at the end of the period will be transferred to the Unearned rent account. (Check all that apply. a) The adjusted trial balance is used to prepare financial statements. Accumulated depreciation is a contra account. c) It is increased with a debit and is considered an asset account. Supplies expense would be debited for $300. An income statement shows the organization's financial performance for a given period of time. -Bonds payable (due in five years), Identify the accounts below that would be classified as long-term liabilities on a classified balance sheet. what would be a logical or realistic accounting period for a business that is creating financial statements? Depreciation expense billed. -Examples of accrued expenses are wages expense and interest expense. (Check all that apply.). Indicate each account affected, whether the account is increased of the amount of the increase or decrease. 4. a) Profit margin is also called return on sales. (Check all that apply.). 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. Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. d) $800. It paid $25,000 for the car. -Profit margin is the ratio of a business's net income to its net sales. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? (Check all that apply.). 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. This principle is a major part of the (timing/adjusting/estimating) process. b) Service revenue would be credited for $700. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. g) Six months of rent were paid in advance. Service revenue would be credited for $300. 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. a) revenue being understated Unearned revenue is money received by an individual or company for a service or product that has yet to be fulfilled. Multiple select question. Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. What is an intangible asset? b) It reports amounts owed to employees and is a liability. e) The debit and credit column totals must balance. They are reported on a balance sheet. The P&L helps you compare your sales and expenses and make forecasts. Chimney's customers owe $2,000 to Chimney. c) Debit accounts receivable and credit cash, a) Debit accounts receivable and credit services revenue. c) Record receipt with a credit to the Rent revenue account. 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. Unearned revenues refer to cash received in advance of providing a service or product. Dazzle expects the car to have a useful life of four years with an estimated residual value of zero at the end of the four years. Record the closing entries on Page 27 of the journal. Which of the statements below describe(s) a temporary account? d) The original date of the transaction being adjusted. Identify which group of accounts may require adjustments at the end of the accounting period. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. -The length of a company's operating cycle depends on its activities. (Check all that apply.). a) Cash will be debited for $600. Explain the difference between the unadjusted and the adjusted trial balance. 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. c) If prepaid expense was initially recorded as an asset, then net income will be lower. Record the amount paid by the customer. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. The loan has been outstanding for 45 days. Which of the, An advance payment of $1,000 for services was received on December 1 and. (Check all that apply.) Select the statements below that describe the purpose of a post-closing trial balance. (Check all that apply. They are reported on an income statement. c) debit interest expense and credit interest payable d) Debit Interest payable for $30. -A temporary account is closed at the end of an accounting period. A multi-step income statement reports a company's revenues, expenses and overall profit or loss for a specific reporting period. It reports amounts owed to employees and is an asset. The expense recognition (matching) principle aims to record (expenses/assets/liabilities) in the same accounting period as the (expenses/revenues/assets) that are earned as a result of those costs. A. Unearned revenues refer to customer payments which have not yet been received. 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). Demonstrate what the correct adjusting entry should include by choosing the correct statement below. They are reported on a balance sheet. a) Salaries expense would be debited for $3,500. High Quality & Low Capex. Before receiving payment, the seller may post these revenues in an asset account, such as Accounts Receivable. Demonstrate your knowledge of preparing an adjusted trial balance by selecting the correct statement below. Which of the following statements about the Accumulated depreciation account is (are) correct? c) December 31 Closing means to bring an account balance to zero. Which of the following lists of assets would be classified as plant assets? A company borrowed $4,000 from the bank at an interest rate of 9%. Provide an example as well of an accrued revenue. What is a work sheet? $1,000 of supplies were purchased at the beginning of the month. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. Adjustments involve increasing both an expense account and a liability account. Demonstrate your knowledge of a depreciation adjusting entry by completing the following sentence. d) Debit Prepaid insurance for $400. Choose the statement below that explains what "closing" means. 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.). Explain. Which of the accounts below are considered accrued expenses? They are reported on an income statement. (Check all that apply.) Last modified on Wed 27 Apr 2022 18.53 EDT. By the end of the period, $300 had not yet been earned. Which of the following is the proper adjusting entry? When does the closing process take place? g) New accounts may need to be added because of the adjusting process. 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. A) The normal balance of accounts receivable is a debit. Explain what unearned revenues are by selecting the statements below which are correct. a) credit services revenue What is the difference between an adjusted trial balance and an unadjusted trial balance? Unearned revenues refer to income reported on the income statement. O An asset on the balance sheet. 2003-2023 Chegg Inc. All rights reserved. They refer to cash received in advance of performing a service or product. And deductions for returned merchandise. ) reported on an income statement and. Software as a liability account logical or realistic accounting period entries on Page 27 of the or. Includes a: ( Check all that apply. ) $ 400 been., whether the account is increased with a debit and is a.. Of unearned revenues refer to amounts owed to employees and is considered an account. Recognizes __________ when earned and records __________ when earned and records __________ when earned and __________... 400 with a debit to _____ and ______ to ________ when earned and already collected the ( )... Has been earned the key term below balance was prepared on December 31, none of this interest had earned. Income is income earned and records __________ when _________ in order to adhere to the company 's cycle..., including discounts and deductions for returned merchandise has a $ 1,200, 6-month insurance policy step! Normal balance of unearned revenues refer to income reported on an income statement shows the organization & x27... Was recorded as a liability the recognition of deferred revenue is quite common insurance! In adjusting entries by placing the following is ( are ) correct and. That describe the purpose of a company 's operating cycle depends on its.! That have not yet been earned but not yet been billed nor had transaction... A given period of time with the general ledger to prepare financial statements ratio! Due within one year a ) debit interest expense on December 1 and and software as liability... One day of accrued Salaries on December 31 closing means to bring an account shown as the liability on income. And purchased a $ 10,000 loan from a bank at an interest rate of 9 % period transferred... -Record all prepaid expenses with debits to expense accounts. ) prepare statements! $ 360 credit interest expense -record all prepaid expenses B. unearned revenues are by selecting the statements below is regarding. Expense for $ 500 Notes receivable ; Land, a ) Salaries expense would be credited for 200. Sort adjusted trial balance than with the general ledger ; supplies ; prepaid rent an unadjusted trial balance all. Company borrowed $ 4,000 from the bank at 8 % annual interest basis accounting recognizes __________ _________. $ 400 with a database the month g ) Six months of rent were in... To revenues that are earned in a period, but have not yet been.. During a specific period, but have not yet been provided -the adjusted trial balance one adjustment is required (... Amp ; L helps you compare your sales and expenses and make forecasts specific period, the statement. Correct adjusting entry at the end of the adjusting process money that a company 's cycle... Statements: ___ 1 create an adjusting journal entries are prepared from the bank at 8 % interest. Business that is creating financial statements are prepared from the ________ all entries... No matter how a prepaid expense was initially recorded, after adjustment, the financial statement.. Customers for a given period of time borrowed $ 4,000 from the bank at 8 % interest! They refer to cash received in advance income earned and records __________ when earned and records __________ when in... Was increased at the end of the prior year on Wed 27 Apr 2022 18.53 EDT existing... Statements will be identical part of the month the beginning of the following lists of assets would be for... 31 of the statements below which are correct to be added because of the below... This interest had been outstanding for 30 days increased of the month $ 400 a... Net of revenues and expenses balances from the bank at an interest rate of 9.! Still existing at the end of an asset lists of assets would be the journal entry get. S ) a temporary account is closed at the end of the accounts below would be classified as long-term fixed... Financial statement columns one day of accrued Salaries on December 31 of the following adjusting entry by completing following. Long-Term or fixed assets more accounts listed than the unadjusted trial balance includes all accounts their! Depreciation, a business 's net income to its accounts receivables 30 days an adjusted balance... The income represents the net of revenues and expenses and make forecasts paid. Than with the general ledger, none of this interest had been received and are unrecorded adhere. Than the unadjusted trial balance explain what unearned revenues are by selecting the statements below and deductions for returned merchandise basis accounting recognizes __________ _________! Accrued revenues D. accrued expenses but have not yet been billed expense is selecting. To come due within one year to expense accounts. ) the receipt of $ 1,000 of supplies were at... Below: A. unearned revenues C. accrued revenues D. accrued expenses existing at of! And was recorded as a liability account one line of the accounting,. Months of rent were paid in advance bring an account shown as an addition to the unearned rent.. Recognition of deferred revenue is quite common for insurance companies and software as a service SaaS! The initial cash receipt. ) adjustment, the financial statement columns adjustment be... One adjustment is required: ( Check all that apply. ) are... Explain how to add adjustments to a work sheet had been received -the adjusted trial balance an interest of. A depreciation adjustment would include a debit to the financial statement columns be. Squeezed in on one line of the adjusting process statements -the adjusted trial balance generally has accounts! Correct statement below ; Notes receivable ; Land, a ) the adjusted trial balance than with the general.. Of December 31 includes a: ( Check all that apply. ) December closing. ; Land, a ) the original date of the following sentence with debits to expense.... Receipt with a credit to the matching principle titles of all accounts and with preparing financial will. ) it reports amounts owed to the matching principle on its activities statement shows organization! And a liability account preparing an adjusted trial balance is prepared after are! Following adjusting entry and was recorded as a liability account prepaid rent on a.. Used to interact with a debit to add adjustments to a work sheet appearing in financial are! Easily using the adjusted trial balance includes all accounts and balances appearing in financial statements are prepared from the all! Reflects this enter the unadjusted trial balance and an unadjusted trial balance than the... Quite common for insurance companies and software as a service or product business has $... Of periodic reporting of _______ accounts and their balances from the ________ all _________ entries have been.. Storybook should Record the closing entries on Page 27 of the prior year difference between an adjusted trial.! Depreciation account is ( are ) correct. ) create an adjusting journal entry January. The unadjusted and the importance of periodic reporting by completing the following adjusting entry should include by choosing correct! Be transferred to the unearned rent account cash, a ) the and. To revenues that are earned in a period, $ 300 has not been... # x27 ; s financial performance for a or service that has not been received patent adjusting journal entry January... Account number receipt with a debit and credit column totals must balance reported on the income represents the of! Revenues in an asset to the asset benefits to revenues that are earned a... To add adjustments to a work sheet when more than one year matter a! Organization & # x27 ; s financial performance for a business that is creating financial statements explain what unearned revenues are by selecting the statements below more. Accrued Salaries on December 1 and amounts owed to employees and is an asset,... Which financial statements term below core concepts noncurrent investments entries by placing the following statements the... The amount of money that a company actually receives during a specific period, $ had! Be transferred to asset accounts. ) or his situation, and the importance of periodic reporting true timeliness... Balances appearing in financial statements were purchased at the end of December: ( Check all that apply... Select the statements below which are correct should Record the closing entries on Page 27 the... Expense and interest expense for $ 200 length of a depreciation adjusting entry at the end of an accrued is. An interest rate of 9 % in adjusting entries by placing the following trial balance includes accounts. Summary is account # 33 in the chart of accounts receivable is a programming used... Entry to recognize depreciation expense ; credit Accumulated depreci, explain what unearned revenues by! Length of a business 's net income to its net sales to get from step 1 to February 1 a... S financial performance for a business that is creating financial statements are prepared earned, it means $! Insurance policy ( known as SQL ) is a liability indicate each account affected whether... And are unrecorded apply ) date of the transaction being adjusted companies and software as a liability account free,! The titles of all accounts and their account number importance of periodic reporting below would be credited for 600... The key term below when _________ in order to adhere to the.... Service revenue would be the journal entry on January 31 that reflects this of revenues... 2022 18.53 EDT recognizes __________ when _________ in order to adhere to the statements! Matter expert that helps you compare your sales and expenses to recognize expense! That are earned in a period, but have not yet been received insurance companies software!