Prepaid Expenses: Prepaid expenses refer to those expenses which are paid in advance, the benefit of which will be received in near future. For example, rent for six months paid in advance.
Unearned Revenue: Unearned revenue occurs when payment for goods and services are received in advance, that is, company receives money before actual delivery of goods and services. As a result, the unearned revenue represents the liability of the company.
Accrued Expenses: Accrued expenses are the expenses recognized in the books of account before making the actual payment. As per accrual system of accounting, expenses are recorded in the period when they are incurred, thereby creating a liability on the company.
Accrued Revenues: Accrued revenues are the revenues earned by the company but not received in actual. It means goods or services have been provided by the company but it is yet to receive its payment, thereby constitute current liabilities of the company.
To identify: Whether the given entry involves prepaid expenses, unearned revenue, accrued expenses and accrued revenues.
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FINANCIAL ACCT.FUND.(LOOSELEAF)
- If an adjustment includes an entry to a payable or receivable account, which type of adjustment is it? A. accrual B. deferral C. estimate D. cullarrow_forwardIdentify which type of adjustment is associated with this account, and what is the other account in the adjustment? Choose accrued revenue, accrued expense, deferred revenue, or deferred expense. A. accounts receivable B. interest payable C. prepaid insurance D. unearned rentarrow_forwardIdentify which type of adjustment is associated with this account, and what the other account is in the adjustment. Choose accrued revenue, accrued expense, deferred revenue, or deferred expense. A. Salaries Payable B. Interest Receivable C. Unearned Fee Revenue D. Prepaid Rentarrow_forward
- If adjusting entries include these listed accounts, what other account must be in that entry as well? (A) Depreciation expense; (B) Unearned Service Revenue; (C) Prepaid Insurance; (D) Interest Payable.arrow_forwardWhich type of adjustment occurs when cash is not collected or paid, but the related income or expense is reportable in the current period? A. accrual B. deferral C. estimate D. cullarrow_forwardA change in accounting policy requires what kind of adjustment to thefinancial statements? A. Current period adjustmentB. Prospective adjustmentC. Retrospective adjustmentD. Current and prospective adjustmentarrow_forward
- Which account is least likely to appear in an adjustingjournal entry?a. Cashb. Interest Receivablec. Income Tax Expensed. Salaries and Wages Expensearrow_forwardWhich of the following appears in the balance sheet accounts section of a pre-adjustment trial balance? A) Opening inventory B) Accrued expenses C) Consumable inventory D) Fixed depositarrow_forward2 3 1 4 5 7 8 9 10 12 Depreciation Expense Accumulated Depreciation Uneamed Revenue Services Revenue Insurance Expense Prepaid Insurance Salaries Payable Cash Prepaid Rent Cash Salaries Expense Salaries Payable Interest Receivable Interest Revenue Cash Accounts Receivable (from consulting) Cash Unearned Revenue Cash Interest Receivable Rent Expense Prepaid Rent Interest Expense Interest Payable 1,400 4,300 3,300 4,500 2,000 3,700 5,400 4,900 9,000 6,000 3,000 1,700 1,400 4,300 3,300 4,500 2,000 3,700 5,400 4,900 9,000 6,000 3,000 1,700arrow_forward
- Classify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR),accrued expenses (AE), or accrued revenues (AR). To record revenue earned that was previously received as cash in advance.arrow_forwardClassify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR),accrued expenses (AE), or accrued revenues (AR). To record revenue earned but not yet billed (nor recorded).arrow_forwardAn end-of-period adjusting entry that debits Unearned Revenue most likely will creditarrow_forward
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