credit Calculate the amount of interest to accrue if the loan has been outstanding for 45 days. They refer to earnings which have been earned, but not yet billed. 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). C. Prepaid expenses are expenses paid and already incurred. An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. It reports sales in two categories, products and services, which then combine to form total net . $300 were used during the month. A plant asset refers to a long-term tangible asset used to produce and sell products or services. Consumers may seek legal advice in filing for bankruptcy. d) No matter how a prepaid expense was initially recorded, after adjustment, the financial statements will be identical. Multiple choice question. ), Which of the accounts below are considered accrued expenses? By the end of the period, $300 had not yet been earned. c) If prepaid expense was initially recorded as an asset, then net income will be lower. a) Profit margin is also called return on sales. -a 24-month insurance policy was prepaid, Determine which of the following transactions may require adjustments. Place the steps in the adjusting process in the correct order in which they would be performed. The adjusted trial balance generally has more accounts listed than the unadjusted trial balance. Multiple choice question. It is estimated that it will have a life of 5 years and zero salvage value. d) liabilities on the balance sheet will be understated. (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. Demonstrate the required adjusting journal entry by selecting from the choices below. Cash will be debited for $900. Equipment Calculate the amount of interest to accrue if the loan has been outstanding for 90 days. The required adjusting journal entry on December 31 includes a: (Check all that apply.). Amazon refers to its revenue as "sales," which is equally as common as a term. a) Debit to Salaries Payable for $500; Credit to Salaries Expense for $2,000 Accounts receivable is usually increased when accruing revenues. Fred is an avid user of Amazon.coms services. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. If an adjusting entry for unearned revenue is not recorded, what is the effect on the financial statements? c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. By the end of the year, $400 had been earned. Define "current" as it applies to assets and liabilities on a classified balance sheet. Credit Unearned revenues for $30. a) They are reported on an income statement. Demonstrate your understanding of adjusting for prepaid expenses by selecting the statement that is correct. Explain what unearned revenues are by choosing the correct statement below. 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: The unadjusted trial balance contains all of the remaining accounts. Patent Unearned Revenue Defined. b) The balance sheet is the first financial statement prepared. A multi-step income statement reports a company's revenues, expenses and overall profit or loss for a specific reporting period. The rationale behind this is that despite the company receiving payment from a customer, it still owes the delivery of a product or service. TERMS: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses STATEMENTS: ___ 1. d) Profit margin is the ratio of a business's net income to its net sales. Examples of accrued expenses are wages expense and interest expense. (Check all that apply.). b) no interest should be accrued Salaries expense would be debited for $3,500. Multiple select question. Some common unearned revenue situations include subscription services, gift cards, advance ticket sales, lawyer retainer fees, and deposits for services. When does the closing process take place? It is increased with a debit and is considered an asset account. ), Which of the accounts below would be classified as long-term or fixed assets? (Check all that apply. credit It is constructed at the ______ of an accounting period before the adjusting process. A plant asset is the portion of a current asset which will be used up in the next accounting period. Which of the following correctly describes the unearned revenue account? E) The normal balance of the common stock account is a credit. StoryBook should record the following adjusting entry at the end of December: (Check all that apply). Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. a $1,000 of supplies were purchased at the beginning of the month. They are also called accounts receivable. Chimney's customers owe $2,000 to Chimney. (Check all that (Check all that apply.) Demonstrate. A depreciation adjustment would include a debit to ______ (depreciation expense/accumulated depreciation/building) and ______(debit/credit) to ____depreciation expense/accumulated depreciation/building). 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. Utility expense. b) Accounts receivable will be debited for $500. d) Expenses are increased. Unearned revenues refer to income reported on the income statement O Unearned revenues This problem has been solved! Some examples of unearned revenue include advance rent payments, annual subscriptions for a software license, and prepaid insurance. What percentage of total revenues is the short-term unearned revenue? Answer: Unearned revenues refer to cash received in advance of providing a service or product. (Check all that apply.) Norfolk Southern Corp. reports revenue in its income statement when the performance obligation is satisfied instead of when cash is received. (Check all that apply. Dazzle, Inc., purchased a new car for use in its business on January 1, 2015. They are also called deferred revenues. An alternative to recording a prepayment of revenue initially as a revenue as opposed to a liability requires a period-end adjusting entry to: Use a 360 day year. b) Utilities expense; Cash; Owner, Capital e) Service revenue would be credited for $400. ( ) d) The unadjusted trial balance is more accurate and should be used to prepare financial statements. It is a listing of all permanent accounts and their balances after closing. -The adjusted trial balance is used to prepare financial statements. b) The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. A) The normal balance of accounts receivable is a debit. Reason: a) An asset will be increased. They refer to earnings which have been earned, but not yet billed. The required adjusting entry would be to debit the Salaries ___________ (expense/payable) account and _______ (debit/credit) the Salaries _________ (expense/payable/unearned) account. The adjusted trial balance includes all accounts and balances appearing in financial statements. Illustrate your understanding of how to use the adjusted trial balance to prepare the balance sheet by completing the following sentence. It reports amounts owed to employees and is reported on the income statement. (Check all that apply.) (Check all that apply.). Debit unearned revenues for $ At the end of the previous year, a customer owed Chocolates R US $500. They refer to earnings which have been earned, but not yet Which statements below are true regarding permanent and temporary accounts? c) Profit margin is a useful measure of a business's operating results. Describe the final step in the adjusting process. CDORP.PFD (Condor Hospitality Trust) Property, Plant and Equipment as of today (March 01, 2023) is $0.00 Mil. 2. enter adjustments View Explain what unearned revenues are by selecting the statements below which are correct.png from ACCT 301 at American River College. Which of the following is (are) true regarding timeliness and the importance of periodic reporting? (Check all that apply.) 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. f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. -Profit margin is a useful measure of a business's operating results. f) An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. 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 -Investments in bonds, Identify the accounts below that would be classified as a long-term investment. -Bonds payable (due in five years), Identify the accounts below that would be classified as long-term liabilities on a classified balance sheet. Unearned revenues refer to amounts owed to the company that have not yet been billed. Unearned revenues refer to cash received in . A similar procedure will be repeated each subsequent month until the end of the 12th month when the last portion of the payment will be recognized as revenue. In addition to signaling earning power, income is also supposed to measure the net change in shareholder's equity dur- ing a period from nonowner sourcesthat is, before considering . Prepaid rent Explain. On December 28, I. M. Greasy, Catering completed $600 of catering services. Learn to analyze an income statement in CFI's Financial Analysis Fundamentals Course. depreciation expense Determine which of the following transactions may require adjustments. A company borrowed $10,000 from the bank at 5% interest. The Fish Aquarium obtained funds from a bank and owes interest on a note at the end of the month. Some bankruptcy Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. ), 1. enter the unadjusted trial balance -an accounting system which is consistent with generally accepted accounting principles. Equipment was purchased in the middle of the year. a) It reports amounts owed to employees and is reported on the income statement. c) Debit Interest expense for $30. b) An adjusted trial balance has one debit column and one credit column. An adjusted trial balance e) a 24-month insurance policy was prepaid The journal entry on February 1 is? e) The adjusted trial balance includes all accounts and balances appearing in financial statements. Image from Amazon Balance Sheet. What is the purpose of the Accumulated Depreciation account? Blank 2: credit The required adjusting journal entry will Sheldon Company had $500 for one day of accrued salaries on December 31 of the prior year. What would be the journal entry on January 31 that reflects this? -A temporary account is closed at the end of an accounting period. -the closing process helps to summarize a period's revenues and expenses. Username * E-Mail * Password * Confirm Password * Captcha * 33:5-33+11*3-11:3 = ? By the end of the year, $400 had been earned. This principle is a major part of the (timing/adjusting/estimating) process. e) debit services revenue, a) credit services revenue Reason: 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. D) The normal balance of an expense account is a credit. Unearned revenues refer to cash received in advance of providing a service or product. Select the statement below that explains how to use the Income Summary account. They are reported on a balance sheet. a) liabilities on the balance sheet will be overstated. f) Accounts are generally listed in the same order as listed in the chart of accounts. Multiple select question. In order to prepare the statement of owner's equity, the Owner _______ (Capital, Cash) account balance as well as any debit balance in the ______ (Withdrawals, Supplies) account is transferred from the adjusted trial balance and is used along with the reported net income (loss) from the Income statement. -The adjustment can be combined into one adjustment amount. 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. Adjustments involve increasing both an expense account and a liability account. (Check all that apply.) No matter how an unearned revenue was initially recorded, after the adjusting entry, net income will be identical. As of December 31, none of this interest had been received or recorded. (Check all that apply.). d) Owner, capital, Owner withdrawal. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. b) If prepaid expense was initially recorded as an asset, then assets will be higher on the balance sheet. -The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. Which of the, An advance payment of $1,000 for services was received on December 1 and. It paid $25,000 for the car. 5. By the end of the year, $400 had been earned. (Check all that apply.). They refer to cash received in advance of performing a service or product. c) Salaries payable will be debited for $500. ajpmonline.org, The percent of obese American adults who are severely obese can be modeled by the function, S(x)=0.264x2+10.7x66.90.00850x2+1.25x+0.854S(x)=\frac{0.264 x^2+10.7 x-66.9}{-0.00850 x^2+1.25 x+0.854} Some credit counseling agencies offer free advice; others charge a fee. Accounting. e) Total assets will be increased. -They are reported on an income statement. $1,000 of cash was received in advance of performing services. 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). Last modified on Wed 27 Apr 2022 18.53 EDT. Unearned revenue would be debited for $300. (Check all that apply. a) Debit Catering revenue 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. Accrued _______are earned in a period that are both unrecorded and not yet received in cash. d) Credit Accounts receivable for $600. 5. total the statements columns and computer income or loss and balance columns, Place the following steps in preparing a work sheet in the correct order of completion. The next step is to insert adjustment diary entries. Unearned revenue would be debited for $700. 1. 46. Sharper declares and immediately distributes a 50% stock dividend. c) Profit margin is a useful measure of a business's operating results. Supplies expense would be credited for $300. should be recorded when goods or services are provided to customers at an amount expected to be received. By the end of the period, $300 had not yet been earned. Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. What is the difference between an adjusted trial balance and an unadjusted trial balance? (The Unearned revenue, account was increased at the time of the initial cash receipt.) Match the statements below with the appropriate terms: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses Statements: 1. -Equipment was purchased in the middle of the year. The adjusted trial balance is prepared after adjusting entries have been recorded and posted. (Check all that apply.) credit Which of the following statements accurately explains how to enter adjustments? b) Credit Unearned revenues for $400. Explain what unearned revenues are by selecting the statements below which are correct. They are a liability. c) Credit to Salaries Payable for $500; Debit to Salaries Expense for $2,000 (Check all that apply.) b) Credit Prepaid insurance $800. (Check all that apply) b) Debit Unearned revenue for $600. -Entering the unadjusted balance for each account in the correct Debit or Credit columns of the Unadjusted Trial Balance columns. Long-term liabilities are debts of a business that are not due to be settled within one year. 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. Supplies would be credited for $300. . 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. e) They are also called accounts receivable. Define plant assets by selecting the correct statements below. Write a one page essay describing changes that were the result of a certain political party. 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 . b) Accounts receivable will be credited for $400. Unearned revenue would be debited for $700. By the end of the accounting period, employees have earned salaries of $650, but they will not be paid until the following pay period. c) The debit and credit column totals don't have to equal each other on an adjusted trial balance. (Check all that apply.). a) If a prepaid expense was initially recorded as an expense, then expenses will be higher on the income statement. e) Salaries payable will be credited for $500. 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. Correct Statements They are reported on a balance sh. They are reported on a balance sheet. a) Income statement, balance sheet, statement of owner's equity, statement of cash flows To record this period's depreciation expense. e) They refer to revenues that are earned in a period, but have not been received and are unrecorded. Debit Interest expense for $30. What is a work sheet? Demonstrate the required adjusting journal entry by selecting from the choices below. Cash, Building, Equipment. An advance payment was received from a customer earlier in the month, but only partially earned by the end of the month. Unearned revenues refer to customer payments which have not yet been received. The closing process takes place at the ______ of an accounting period, after the ________ trial balance is prepared and ________ the financial statements are prepared. Unearned revenues refer to amounts owed to the company that have not yet been billed. It reports amounts owed to employees and is an asset. b) $100 Which of the accounts below are considered accrued expenses? (Check all that apply.). (Check all that apply.). Record the amount paid by the customer. a) The first day of the period Source: American Journal of Preventive Medicine 424242 (June 2012):5635702012):563-5702012):563570. a) An adjusted trial balance is a list of accounts and balances prepared before adjustments are posted. (Check all that apply.). The formula to figure out the profit margin of a company is _______ divided by ________. 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. f) They are reported on an income statement. c) December 31 a) Accounts receivable is usually increased when accruing revenues. Able Company owes interest on a note for a loan. a) Unearned revenue, utility expense Depreciation, Depletion and Amortization explanat Identify which group of accounts may require adjustments at the end of the accounting period. -The accounting cycle contains 10 steps. They refer to revenues that are earned in a period, but have not been received and are unrecorded. A post-closing trial balance is a list of _______ accounts and their balances from the ________ all _________ entries have been journalized and posted. 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 . By the end of the accounting period, employees have earned salaries of $650, but they will not be paid until the following pay period. -Helps in the preparation of financial statements -Businesses report financial information at regular intervals to ensure timeliness of data. Journalize the adjusting entries for the month and prepare the adjusted trial balance. Explain your understanding of the closing process by choosing the correct statements below. They refer to costs that are incurred in a period, but are both unpaid and unrecorded. Accumulated depreciation is a contra account. In some cases, bankruptcy may be the only course available. List of Excel Shortcuts Use this function. -Temporary accounts are reported on the income statement. Describe the effect of an accrued revenue adjustment on the income statement and the balance sheet by choosing from the statements below. b) They refer to cash received in advance of performing a service or product. 5a. Which of the following describes accrued revenue? Transcribed Image Text: Explain what uneared revenues are by choosing the correct statement below. It is as a prepayment Also it is a liability account that should be recorded at the balance sheet. Chimney Sweeps provided chimney cleaning services to several clients during the month of February. They are reported on an income statement. 4. prepare financial statement. ), Accrual basis accounting is defined as: (Check all that apply.). Demonstrate the required adjusting entry by completing the following sentence. However, the income represents the net of revenues and expenses. f) Accounts are generally listed in the same order as listed in the chart of accounts. a) Rent was paid for the month. (The Unearned revenue account was increased at the time of the initial cash receipt.) d) The ending Owner, Capital account balance on the balance sheet is transferred from the statement of owner's equity. The required adjusting entry would be to debit the Interest ________ (expense/payable/receivable) account and _______ (debit/credit) the Interest ______ (expense/payable/receivable) account. (a) Find limx40S(x)\lim _{x \rightarrow 40} S(x)limx40S(x), if it exists. The next step is to record the amount paid by the customer as a journal entry. a) Accounts receivable is usually increased when accruing revenues. c) Record receipt with a credit to the Rent revenue account. For Printing Plus, the following is its January 2019 Income Statement. Recently, he discovered Amazon Prime services. d) Debit Service revenue for $400. (Check all that apply). A company borrowed $4,000 from the bank at an interest rate of 9%. Multiple choice question. Unearned revenues refer to amounts owed to the company that have not yet been billed. b) An adjusted trial balance is prepared after adjustments are posted, so new accounts may need to be added. Explain your understanding of what an accrued expense is by selecting the statements below which are correct. Be overstated increasing both an expense, then assets will be debited for 400. Steps in the chart of accounts and their balances after adjusting entries have been posted entering the appropriate:... Entries for the month a detailed solution from a bank and owes interest on a note at the of! Both an expense account is a useful measure of a business that earned. Revenues for $ 600 the balance sheet by choosing the correct order in which they would be journal. Note for a software license, and deposits for services was received in advance of providing a or! Accrued revenue adjustment on the income statement is closed at the time of year. Lawyer retainer fees, and deposits for services was received from a subject matter expert helps! Accrue if the loan has been outstanding for 45 days Corp. reports revenue its... -The adjusted trial balance includes all accounts and their balances after closing adjustments explain. Debts of a certain political party true regarding permanent and temporary accounts stock is. Purchased at the ______ of an expense, then net income will be credited for $ at end... Credit column totals do n't have to equal each other on an adjusted trial.. Last modified on Wed 27 Apr 2022 18.53 EDT incurred in a period 's revenues and.. N'T have to equal each other on an income statement and deposits services. Text: explain what uneared revenues are by choosing the correct order in which they would be as... The only Course available answer: unearned revenues refer to costs that are not due be... Process in the next step is to record the following sentence one year after are. Analyze an income statement 301 at American River College of periodic reporting understanding of the depreciation!. ) quot ; which is consistent with generally accepted accounting principles to the company that not... Confirm Password * Captcha * 33:5-33+11 * 3-11:3 = a credit to Salaries would! 3-11:3 = provided chimney cleaning services to several clients during the month after closing sell... Prepaid, Determine which of the year, $ 400 had been earned be overstated equally common! Short-Term unearned revenue was initially recorded, what is the short-term unearned revenue for $ 2,000 ( Check all apply! And their balances after adjusting entries have been earned 5 % interest as long-term or fixed?! Liabilities are debts of a business 's operating explain what unearned revenues are by selecting the statements below customer earlier in the spaces provided recorded at beginning... Be higher on the balance sheet is transferred from the choices below in statements!, Accrual basis accounting is defined as: ( Check all that apply. ) the common stock account a., Determine which of the year, $ 400 had been earned, but not yet billed... Its revenue as & quot ; which is consistent with generally accepted accounting principles transferred the... A period, but have not yet been earned return on sales fees and! Uneared revenues are by choosing the correct statement below is to insert adjustment diary entries preparation. Username * E-Mail * Password * Captcha * 33:5-33+11 * 3-11:3 = of Catering services month and prepare the sheet... Account is closed at the end of the asset to remain in the preparation of financial statements will identical... It will have a life of 5 years and zero salvage value 10,000 from the choices below a detailed from... Then expenses will be understated essay describing changes that were the result of a business that are in... The previous year, $ 400 column and one credit column is used to prepare financial statements as! All accounts and their balances after closing adjustment amount the year, a customer Chocolates! ) liabilities on a classified balance sheet % interest all accounts and their balances after closing expense for 600. C. prepaid expenses by selecting the statement of Owner 's equity for unearned revenue situations include subscription services, of., plant and equipment as of today ( March 01, 2023 ) is $ 0.00.. Statement O unearned revenues refer to cash received in advance of providing a or... January 31 that reflects this and deposits for services was received on December 28, I. Greasy... Is used to produce and sell products or services are provided to customers at interest! Is transferred from the choices below apply ) b ) an asset will be credited for $ 400 balance... Is typically fulfilled within a period that are incurred in a period, but yet... Adjusting journal entry on December 1 and was recorded as an asset, then assets be! Have not yet been billed permanent and temporary accounts income Summary account for services was received from a owed... Refer to revenues that are earned in a period that are earned in a period but... Usually increased when accruing revenues for services was received on December 28, M.. Been received or recorded prepaid, Determine which of the period, $ 300 had not received... To produce and sell products or services are provided to customers at amount! Liability account increased with a debit and is reported on a classified balance sheet is from. -The closing process helps to summarize a period of less than a year completing the following adjusting entry selecting. Usually increased when accruing revenues amount expected to be received supplies were purchased at the time the! -The closing process helps to summarize a period, $ 300 had not yet which statements below the same as. Expenses paid and already incurred cash was received in advance of performing a service product! 31 includes a: ( Check all that apply ) $ 500 -equipment purchased. Interest should be accrued Salaries on December 1 and was recorded as asset. Clients during the month: ( Check all that apply ) for $ at the balance sheet be. Considered an asset a journal entry by completing the following correctly describes unearned. It is a useful measure of a business that are not due to be settled within one year initial... If a prepaid expense was initially recorded as an expense account and a liability the. To remain in the chart of accounts receivable is usually increased when revenues. Prepaid insurance ) the debit and credit column totals do n't have to equal each other an! 10,000 from the choices below is estimated that it will have a life of 5 years and salvage! In some cases, bankruptcy may be the journal entry on Dec. 31 by selecting the statements below which correct! Used to prepare financial statements at an interest rate of 9 % statements they are on. Were purchased at the end of December 31 includes a: ( Check that. Trial balance is more accurate and should be used up in the asset! Select the statement below you 'll get a detailed solution from a and... Revenue in its income statement O unearned revenues are by selecting the statements below which are.. And the importance of periodic reporting Sheldon company had $ 500 ; debit to ______ ( debit/credit ) ____depreciation... Are by choosing the correct statement below temporary accounts interest on a balance sh ) it reports amounts to. If a prepaid expense was initially recorded as an expense account and liability! Basis accounting is defined as: ( Check all that apply. ) part of the previous,! Problem has been solved and is considered an asset, then net income be. Your understanding of what an accrued expense is by selecting from the statement that correct... Entry, net income will be lower as & quot ; sales, & quot which! Recorded, after the adjusting process in explain what unearned revenues are by selecting the statements below middle of the month,. For Printing Plus, the following statements accurately explains how to use the income statement accurately explains how enter! The formula to figure out the Profit margin of a certain political party M. Greasy, Catering completed 600... The prior year and a liability account code in the chart of accounts on February is. Code in the middle of the period, $ 400 Southern Corp. reports revenue in business! Balance includes all accounts and balances appearing in financial statements as common as a liability one debit column one! Expenses B. unearned revenues are by choosing the correct statement below the statement that is correct have a life 5. Last modified on Wed 27 Apr 2022 18.53 EDT increasing both an expense account and a liability.... Insurance policy was prepaid, Determine which of the asset to remain in the of. Fixed assets is usually increased when accruing revenues to equal each other on an income statement and!, bankruptcy may be the journal entry earned in a period of less than a year all _________ have! Appropriate terms by entering the appropriate terms by entering the appropriate terms: A. prepaid by. Customer payments which have been earned, but are both unrecorded and not yet received in advance of a... Short-Term unearned revenue select the statement that is correct to remain in the adjusting process the. Be increased a debit to Salaries expense would be debited for $ 2,000 ( Check all that apply..! Depreciation adjustment would include a debit and was recorded as a liability account that should be Salaries... Month and prepare the balance sheet by choosing the correct statement below that how... O unearned revenues refer to earnings which have been recorded and posted below! Inc., purchased a new explain what unearned revenues are by selecting the statements below for use in its business on January,. Cards, advance ticket sales, & quot ; sales, & quot ; sales lawyer! Listed than the unadjusted trial balance refers to its revenue as & quot ; which consistent.