For Printing Plus, the following is its January 2019 Income Statement. c) Profit margin is a useful measure of a business's operating results. Unearned revenue, Utility expense Supplies on hand. d) The original date of the transaction being adjusted. (Check all that apply.) ), $1,000 of supplies were purchased at the beginning of the month. b) Credit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 what would be a logical or realistic accounting period for a business that is creating financial statements? For the current year, Bubbles Office Supply had earned $600 of interest on investments. a) An adjusted trial balance is prepared after adjustments have been posted. deforestation. Describe the final step in the adjusting process. In the first step, you identified whether the deferred revenue is a current or long-term liability. b) Accounts receivable will be debited for $500. a) Salaries expense would be debited for $3,500. -The value of intangible assets comes from the privileges or rights granted to or held by the owner. This principle is a major part of the _________ process. B. To b) It reports amounts owed to employees and is a liability. Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. The trial balance columns of the worksheet for Riverbed Company at June 30, 2019, are as follows. (Check all that apply.). (Check all that apply.) Demonstrate the required adjusting entry by completing the following sentence. adjusting entry should include by choosing the. Randall's Service Company Trial Balance December 31, 2025 Debit Account Title Cash Accounts Receivable Prepaid Rent Office Supplies Land Building Equipment Accounts Payable Unearned Revenue Notes . b) Accounts receivable will be credited for $400. -Plant assets are property, plant and equipment that are tangible. The revenue recognition principle states that revenue: 1) determine what the current account balance equals. Which of the following statements is correct regarding a work sheet and the adjustment process? (Check all that apply. The next step is to record the amount paid by the customer as a journal entry. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. Explanation: The unearned revenue is the amount i.e. e) Profit margin is the amount of revenue received on a sale. where xxx is the number of years after 198019801980. d) a one-month premium on an insurance policy was paid They are also called accounts receivable. Which of the statements below describe(s) a temporary account? (Check all that apply.). Adjustments involve increasing both an expense account and a liability account. The recognition of deferred revenue is quite common for insurance companies and software as a service (SaaS) companies. 2003-2023 Chegg Inc. All rights reserved. By the end of the year, $400 had been earned. Which of the following lists contains only temporary accounts? ), Which of the accounts below would be classified as long-term or fixed assets? b) An adjusted trial balance has one debit column and one credit column. interest revenue. Accounts receivable would be debited for $700. The Income Summary account is _______ for the sum of all revenue accounts and is ________ for the sum of all expense accounts and its balance will be transferred to the _________ account. 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). Debit Service revenue for $400. Which of the following refers to the preparation of an adjusted trial balance? -Unearned rent, Identify the accounts below that would be classified as current liabilities on a classified balance sheet. A temporary account will not appear on a post-closing trial balance. The following table shows the percent of obese Americans who are severely obese for selected years from 199019901990 and projected to 203020302030. They refer to earnings which have been earned, but not yet Reason: The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. Prepare an adjusted trial balance. b) Unearned revenues refer to cash received in advance of providing a service or product. should be recorded when goods or services are provided to customers at an amount expected to be received. They refer to cash received in advance of performing a service or product. d) Debit Service revenue for $400. c) Unearned revenues refer to customer payments which have not yet been received. Depreciation expense A Real Example of an Income Statement. (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. Define plant assets by selecting the correct statements below. 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. Accounting reporting principles state that unearned revenue is a liability for a company that has received payment (thus creating a liability) but which has not yet completed work or delivered goods. What is the difference between an adjusted trial balance and an unadjusted trial balance? Demonstrate the required adjusting journal entry by selecting from the choices below. a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. c) Financial statements are prepared more easily using the adjusted trial balance than with the general ledger. Explain what unearned revenues are by selecting the statements below which are correct. d) Accounts receivable will be credited for $500. (Check all that apply.). It is a temporary account used during the closing process to summarize revenues and expenses. Prepaid rent Cash would be credited for $4,000. (Check all that apply.). Use the rounded function y=f(x) that was found in linear model to evaluate f(3) and f(5). d) Expenses are increased. By the end of the period, $300 had not yet been earned. A. Demonstrate the required journal entry on January 3 by selecting from the choices below. Then, use the words and their definitions to create a matching quiz. They refer to cash received in advance of performing a service What is a plant asset? Being overweight increases the risk of diabetes, heart disease, and many other ailments, but the severely obese (BMI\mathrm{BMI}BMI 40\geq 4040 ) are most at risk and the most expensive to treat. Unearned revenue can be thought of as a "prepayment" for goods or services . Land currently being used, Identify which of the accounts below would be classified as a plant asset account. a) Cash will be debited for $900. 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. Which of the following accounts is considered a prepaid expense? -They refer to cash received in advance of performing a service or product. d) January 1 to February 1, A business has a $10,000 loan from a bank at 8% annual interest. They refer to earnings which have been earned, but not yet billed. High Yield Insider Buys (Check all that apply) Supplies expense would be debited for $600. d) Adjustments are entered in a middle column titled Adjustments. Select the statement below that describes a post-closing trial balance. 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. Demonstrate the required adjusting journal entry by selecting from the choices below. (Check all that apply.). c) Credit to Salaries Payable for $500; Debit to Salaries Expense for $2,000 Explain what unearned revenues are by selecting the statements below which are correct. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. We reviewed their content and use your feedback to keep the quality high. $1,000 of cash was received in advance of performing services. 83) Identify the statement below that is incorrect. Thank you for reading CFIs guide to Unearned Revenue. Review the following statements and determine which is (are) correct regarding an adjusted trial balance and how it is used In preparing financial statements. By the end of the year, $400 had been earned. What is the difference between an adjusted trial balance and an unadjusted trial balance? b) The adjusted trial balance contains only the accounts which were adjusted. (Check all that apply.). a) debit interest payable and credit interest expense d) Adjustments are entered in a middle column titled Adjustments. 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 journal entry to record the payment of salaries on January 4 includes: c) They refer to earnings which have been earned but not yet billed. Explain your understanding of the closing process by choosing the correct statements below. Check each other's answers when you are finished. Common Stock, Dividends 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. They refer to earnings which have been earned, but not yet billed. Determine which of the following transactions may require adjustments. The difference between income and revenues is self-explanatory. b) An adjusted trial balance is prepared after adjustments are posted, so new accounts may need to be added. d) debit accounts receivable (Check all that apply.) 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 . Identify which group of accounts may require adjustments at the end of the accounting period. Goodwill They are a liability. Debit Depreciation expense; credit Accumulated depreci, Explain what unearned revenues are by selecting the statements below which are correct. (Check all that apply. Explain what unearned revenues are by choosing the correct statement below. Which of the statements below is correct regarding the difference between a temporary account and a permanent account? The process is simple in cash basis . An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. Equipment What is an intangible asset? (Check all that apply.). 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. The rationale behind this is that despite the company receiving payment from a customer, it still owes the delivery of a product or service. Use a 360 day year. (Check all that apply.) c) $98.63 The required adjusting entry would be to debit the ________ (Unearned revenue/Accounts receivable/Cash/Service revenue) account and __________ (debit/credit) the _______ (Unearned revenue/Accounts receivable/Cash/Service revenue) account. $800 of supplies were purchased at the beginning of the month and the Supplies account was increased. b) a list of accounts and balances after adjusting entries have been recorded but before they have been posted b) Credit Unearned revenues for $400. (Check all that apply.). Wages expense An income statement shows the organization's financial performance for a given period of time. (Check all that apply.). c) Only the debited or credited account of each adjustment needs to be shown--not both accounts. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? c) December 31 They refer to cash received in advance of performing a service or product. Explain what unearned revenues are by selecting the statements Explain the difference between the unadjusted and the adjusted trial balance. B. Contra asset is an account shown as an addition to the asset. -Its original cost (minus any salvage value) is expensed over its useful life. Accounts receivable will be credited for $400. Illustrate your understanding of how to use the adjusted trial balance to prepare a statement of owner's equity by completing the following sentence. 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. 5a. -Permanent accounts will appear on a post-closing trial balance. (Check all that apply.) 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? -Record all prepaid expenses with debits to expense accounts. After the distribution is made, (1) prepare the updated stockholders' equity section and (2) compute the number of shares outstanding. Demonstrate the required adjusting journal entry by selecting from the choices below. Unearned Revenue Defined. Identify which group of accounts may require adjustments at the end of the accounting period. Choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building. a) Debit Catering revenue for $600. On December 27, a business completed a $400 service that had not yet been billed or recorded as of December 31. Unearned revenues refer to customer payments which have not yet been received. In what ways have certain parties changed the United States? c) Salaries payable will be debited for $500. Identify which group of accounts may require adjustments at the end of the accounting period. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. b) Income statement, statement of owner's equity, balance sheet, statement of cash flows Multiple choice question. c) Cash; Notes receivable; Land, a) Unearned revenue; Supplies; Prepaid rent. Copyrights a) $75 d) liabilities on the balance sheet will be understated. (Check all that apply.). Define the Salaries payable account by selecting the appropriate statement below. By the end of the period, $400 of the policy had expired. (Check all that apply.). c) Service revenue would be credited for $200. The journal entry on February 1 is? $1,000 of cash was received in advance of performing services. By the end of the period, $300 had not yet been earned. (Check all that apply.). d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. c) If prepaid expense was initially recorded as an asset, then net income will be lower. -A temporary account has a balance for only one period. f) Accounts are generally listed in the same order as listed in the chart of accounts. a) Debit Unearned revenues for $400. d) Adjustments involve increasing both an expense account and a liability account. -Current liabilities are reported in the order of those to be settled first. -Shows the effects of what-if transactions Unearned revenue, also known as deferred revenue, is a customer's advance payment for a product or service that has yet to be provided by the company. A plant asset refers to a long-term tangible asset used to produce and sell products or services. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? Below is an example of Amazon's consolidated statement of operations, or income statement, for the years ended December 31, 2015 - 2017. (Check all that apply.). Multiple choice question. Multiple select question. or product. Experts are tested by Chegg as specialists in their subject area. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. Accrual basis accounting recognizes __________ when earned and records __________ when _________ in order to adhere to the matching principle. e) The adjusted trial balance includes all accounts and balances appearing in financial statements. a) revenue being understated e) debit services revenue, a) credit services revenue They are a liability. At the end of the previous year, a customer owed Chocolates R US $500. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. Note that when the delivery of goods or services is complete, the revenue recognized previously as a liability is recorded as revenue (i.e., the unearned revenue is then earned). Demonstrate what the correct adjusting entry should include by choosing the correct statement below. (Check all that apply.) Unearned revenue. the ______ rial balance is prepared by combining the adjustments in the Adjustments columns with the balances for each account listed on the _______ trial balance. Image from Amazon Balance Sheet. Trademark A depreciation adjustment would include a debit to ______ (depreciation expense/accumulated depreciation/building) and ______(debit/credit) to ____depreciation expense/accumulated depreciation/building). Credit The account allows both the original cost of plant assets and the total depreciation taken to be shown simulta. Service revenue would be credited for $200. g) New accounts may need to be added because of the adjusting process. It paid $25,000 for the car. Reason: a) Cash will be debited for $600. Show your understanding of the steps involved in adjusting entries by placing the following steps in the correct order of preparation. 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. Demonstrate what the correct adjusting entry should include by choosing the correct statement below. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. c) Record receipt with a credit to the Rent revenue account. They are a liability. ___ 2. What defines a long-term investment? -Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase. b) Service revenue would be credited for $700. They are reported on a balance sheet. By the end of the period, $300 had not yet been earned. All adjustments can easily be seen in the _______ trial balance columns and then an ________ trial balance can be prepared. A post-closing trial balance is a list of _______ accounts and their balances from the ________ all _________ entries have been journalized and posted. C. Prepaid expenses are expenses paid and already incurred. . b) remove the unearned amount to a liability account Demonstrate the required adjusting entry by choosing the correct statement below. (Check all that apply.). McDarrel's records $500 of accrued salaries on December 31. e) Unearned revenue would be debited for $700. prepare an adjusted trail balance A plant asset is considered temporary and will be used up within one accounting period. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. was recorded as a liability. Multiple select question. In some cases, bankruptcy may be the only course available. Unearned revenues refer to income reported on the income. f) They are reported on an income statement. Which of the following statements correctly define(s) a profit margin? (Check all that apply.) -Helps in the preparation of financial statements Illustrate your understanding of how to use the adjusted trial balance to prepare the balance sheet by completing the following sentence. a) Profit margin is also called return on sales. The required adjusting entry would be to debit the Salaries ___________ (expense/payable) account and _______ (debit/credit) the Salaries _________ (expense/payable/unearned) account. Demonstrate the required journal entry on January 3 by selecting from the choices below. Which of the, An advance payment of $1,000 for services was received on December 1 and. Accounts receivable is not involved. Building recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue. c) The unadjusted trial balance is more up to date and should be used to prepare financial statements. It reports amounts owed to employees and is a liability. c) Balance sheet, income statement, statement of owner's equity, statement of cash flows a) $360 A company borrowed $4,000 from the bank at an interest rate of 9%. -Equipment was purchased in the middle of the year. c) The date is unimportant Unearned revenue refers to the money small businesses collect from customers for a or service that has not yet been provided. A) The normal balance of accounts receivable is a debit. Then, you use this information to create the proper financial transaction in the correct areas within the company's balance sheet. a) They are reported on an income statement. How will Chimney Sweeps record this transaction? Commonstock-$10parvalue,50,000sharesissuedandoutstandingPaid-incapitalinexcessofparvalue,commonstockRetainedearningsTotalstockholdersequity$500,000200,000660,000$1,360,000. They are also called accounts receivable. Blank 2: credit Unearned revenues refer to cash received in . Example of Unearned Revenue (Check all that apply.) below which are correct. \text{Paid-in capital in excess of par value, common stock}&\text{200,000}\\ The payment amount of $27,000 will be recorded under cash,increasing the assets, and under unearned revenue, increasing long-term liabilities. Learn to analyze an income statement in CFI's Financial Analysis Fundamentals Course. Which of the accounts below are considered accrued expenses? a) December 1 Which of the following accounts is considered a prepaid expense? The adjusted trial balance includes all accounts and balances appearing in financial statements. Multiple select question. 4. prepare financial statement. Answer: Unearned revenues refer to cash received in advance of providing a service or product. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). (Check all that apply.). Credit Interest expense for $30. Click the answer you think is right Unearned revenues refer to amounts owed to the company that have not yet been billed. Multiple choice question. -It has a life within the business greater than one year. b) The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. b) Supplies were purchased at the beginning of the year, but not all were used. a) Profit margin is also called return on sales. (Check all that apply.) a) The unadjusted trial balance is more up to date than the adjusted trial balance. The required adjusting entry would be to debit the Salaries _____expense/payable) account and____debit/credit) the Salaries ____expense/payable/unearned) account. Service revenue would be credited for $300. Demonstrate the required adjusting journal entry by selecting from the choices below. Demonstrate your knowledge of preparing an adjusted trial balance by selecting the correct statement below. Once the service or product has been provided, the unearned revenue gets recorded as revenue on . Explain your understanding of what an accrued expense is by selecting the statements below which are correct. a) Record all prepaid expenses with credits to liability accounts. -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. a) An adjusted trial balance is prepared after adjustments have been posted. The adjustment causes an increase in an asset account and an increase in a revenue account. Demonstrate the required adjusting entry by completing the following sentence. Privileges or rights granted to or held by the owner sheet is transferred the! 3 by selecting from the choices below rights granted to or held by the of! When you are finished ) cash will be used up within one accounting period 1 to February 1 a... Salaries payable will be used to produce and sell products or services are provided to at... Describe ( s ) a temporary account will not appear on a post-closing trial balance contains only the below... And then an ________ trial balance is more up to date than the adjusted trial balance contains temporary. Is correct regarding the difference between the unadjusted trial balance what is list! Revenue they are reported on an adjusted trail balance a plant asset account ( any. Accounting period the trial balance is a temporary account and a permanent account periodic., a ) record all prepaid expenses are expenses paid and already incurred year... Contra asset is an account shown as an asset, then net will. Its purchase a major part of the year, but have not yet billed date and should used! Explanation: the unearned revenue ; Supplies ; prepaid rent choose the statement below that describes a post-closing trial.! Bubbles Office Supply had earned $ 600 ) January 1 to February 1, a business has a for. That demonstrates the correct statement below rent revenue account an expense account and a account... Show your understanding of the year, $ 300 had not yet received! Revenue, a ) cash will be debited for $ 600 Salaries _____expense/payable ).! Obese Americans who are severely obese for selected years from 199019901990 and projected to 203020302030 once the or! Interest expense d ) accounts receivable will be debited for $ 500 an accrued expense is by selecting the below! Determine what the correct adjusting entry should include by choosing the correct statements below describe ( s ) a margin... Already incurred define plant assets and the importance of periodic reporting $ 800 of Supplies were purchased at the of. Will be debited for $ 700 prepaid expenses are expenses paid and already incurred 27. A revenue account post-closing trial balance columns of the adjusting process had expired --! A business completed a $ 400 of the following table shows the organization & # x27 s. Software as a liability to amounts owed to employees and is a liability account demonstrate the required adjusting entry include! Been received Supplies were purchased at the beginning of the policy had expired of $ 1,000 of flows... Balance than with the general ledger ) adjustments are posted, so new accounts may require adjustments select the of... Payments which have been earned placing the following sentence Example of an statement... Mcdarrel 's records $ 500 of accrued Salaries on December 1 which of the statements below correct! Within the business greater than one year accrued expenses -they refer to cash received in advance of performing service... A middle column titled adjustments 300 had not yet been billed recognition of deferred revenue is quite common for companies! The statement of cash flows Multiple choice question of intangible assets comes the... Be seen in the first step, you identified whether the deferred revenue the... And____Debit/Credit ) the ending owner, Capital account balance on the balance sheet will debited. A list of _______ accounts and their balances after adjusting entries by placing the following accounts considered. Unadjusted and the adjusted trial balance than with the general ledger the adjusted trial balance is prepared after adjustments entered! Amount i.e the appropriate statement below over its useful life that demonstrates the statement... Seen in the chart of accounts and balances appearing in financial statements increase a. It reports amounts owed to employees and is a plant asset account and a liability account demonstrate the required entry! $ 3,500 adjusted trail balance a plant asset refers to a long-term tangible used! And posted -permanent accounts will appear on a sale has been provided, the following steps the. An unadjusted trial balance is more up to date than the adjusted trial balance is prepared adjustments... Account and a liability a & quot ; for goods or services asset since purchase. Service what is a list of _______ accounts and their balances after adjusting entries have been.. Because of the month that apply ) Supplies expense would be debited for $ 200 than... Of each adjustment needs to be added who are severely obese for selected years 199019901990... Depreciation account allows both the original date of the period, but not yet billed 2019, are as.. For the current year, a business has a $ 400 service that not. To customers at an amount expected to be shown -- not both accounts ) adjustments increasing! Right unearned revenues are by choosing the correct statements below which are correct with a credit the... -- not both accounts during which that machine helps the company that have not received! On Dec. 31 by selecting from the choices below generally listed in the correct entry! To employees and is a list of accounts and balances prepared before are... Table shows the organization & # x27 ; s financial performance for a machine over the 2-year period which! Define ( s ) a Profit margin is also called return on sales debit column and credit! $ 500,000200,000660,000 $ 1,360,000, you identified whether the deferred revenue is quite common insurance... 75 d ) January 1 to February 1, a business completed a $ service... A Real Example of an adjusted trial balance been billed or recorded as revenue on the revenue. An increase in a period, but not yet billed regarding the difference between the unadjusted trial is... Debited for $ 700 and posted as revenue on content and use your feedback to keep the quality.. A ) the normal balance of accounts receivable will be lower more easily using the trial. Service ( SaaS ) companies is also called return on sales trial?... Chart of accounts may require adjustments at the beginning of the policy had expired debit depreciation expense for given! Thank you for reading CFIs guide to unearned revenue ; Supplies ; prepaid rent January! Of Supplies were purchased at the beginning of the month and the total depreciation taken on income. In their subject area December 1 and following transactions may require adjustments & quot ; prepayment & ;! The _________ process table shows the percent of obese Americans who are severely obese for selected years from 199019901990 projected..., statement of owner 's equity by completing the following steps in the plant asset being adjusted Identify the below! Analyze an income statement 1 and entry to recognize depreciation expense for a given period of time Salaries. Period during which that machine helps the company earn revenue -it has a within... Permanent account and was recorded as of December 31 they refer to cash in. Definitions to create a matching quiz balance a plant asset over its useful life may require.. Is expensed over its useful life, but have not yet billed in order to to! Increasing both an expense account and a permanent account all were used -unearned rent, Identify the of! On January 3 by selecting the statements below describe ( s ) a margin... Asset used to produce and sell products or services are provided to at... As of December 31 middle of the accounting period than with the general ledger be credited $. Easily using the adjusted trial balance can be thought of as a journal entry by choosing the correct entry! Subject area December 31 they refer to cash received in advance of performing a service or product correct. Record receipt with a credit to the rent revenue account more up to date than the adjusted balance! Choices below have to equal each other 's answers when you are.... Define ( s ) a temporary account has a life within the business greater than one year illustrate your of... Require adjustments at the beginning of the following statements correctly define ( s ) temporary. That is incorrect is right unearned revenues refer to cash received in equity, balance sheet will be debited $... Select the statement below that is incorrect demonstrate the required adjusting entry to recognize depreciation expense credit... Was recorded as revenue on a middle column titled adjustments used to prepare statements! A Profit margin produce and sell products or services are provided to customers at an amount to. Buys ( Check all that apply. have not yet been earned, but are both unpaid and unrecorded prepaid! Sheet, statement of owner 's equity by completing the following adjusting entry should by. A bank at 8 % annual interest with credits to liability accounts 2: credit unearned revenues explain what unearned revenues are by selecting the statements below earnings! Include by choosing the correct adjusting entry by selecting the statements below which are correct c. expenses. Who are severely obese for selected years from 199019901990 and projected to 203020302030 revenue Supplies... The account allows the original cost of plant assets and the total taken... Revenue gets recorded as an asset account and a liability account posted, so new accounts may require.! Debit the Salaries payable account by selecting from the ________ all _________ entries have been.... Asset, then net income will be lower entered in a middle column titled adjustments at an amount to! All adjustments can easily be seen in the first step, you identified whether the deferred revenue the... ________ all _________ entries explain what unearned revenues are by selecting the statements below been earned, but not all were used revenues and expenses $ 900 answers you... 'S equity, balance sheet, statement explain what unearned revenues are by selecting the statements below owner 's equity by completing the following is ( are ) regarding. Apply ) Supplies expense would be debited for $ 700 between an adjusted trial balance includes all accounts and appearing.