Classify the following items as (a) deferred expense (prepaid expense), (b) deferred revenue (unearned revenue), (c) accrued expenses (accrued liability), or (d) accrued revenue (accrued asset). 1 A three-year premium paid on a fire insurance policy. 2 Utilities owed but not yet paid. 3 Supplies on hand. 4 Salary owed but not yet paid. 5 Interest owed but payable in the following period. 6 Subscriptions received in advance by a newspaper publisher. 7 Professional Fees received but not yet earned. 8 Professional Fees earned but not yet received. 9 Interest paid in advance from a bank loan. 10 Rent collected in advance. 11 Services rendered but uncollected. 12 Advertising paid in advance for 3 months. 13 Income collected but not yet earned. 14 Rent paid in advance. 15 Interest collected in advance by the creditor.

Classify the following items as (a) deferred expense (prepaid expense), (b) deferred revenue (unearned revenue), (c) accrued expenses (accrued liability), or (d) accrued revenue (accrued asset). 1 A three-year premium paid on a fire insurance policy. 2 Utilities owed but not yet paid. 3 Supplies on hand. 4 Salary owed but not yet paid. 5 Interest owed but payable in the following period. 6 Subscriptions received in advance by a newspaper publisher. 7 Professional Fees received but not yet earned. 8 Professional Fees earned but not yet received. 9 Interest paid in advance from a bank loan. 10 Rent collected in advance. 11 Services rendered but uncollected. 12 Advertising paid in advance for 3 months. 13 Income collected but not yet earned. 14 Rent paid in advance. 15 Interest collected in advance by the creditor.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.4E: Accruals and Deferrals For the following situations, indicate whether each involves a deferred...

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Accruals and Deferrals For the following situations, indicate whether each involves a deferred expense (DE), a deferred revenue (DR), an accrued liability (AL), or an accrued asset (AA). Example: DE Office supplies purchased in advance of their use __________ 1. Wages earned by employees but not yet paid __________ 2. Cash collected from subscriptions in advance of publishing a magazine __________ 3. Interest on a customer loan for which principal and interest have not yet been collected __________ 4. One years premium on life insurance policy paid in advance __________ 5. Office building purchased for cash __________ 6. Rent collected in advance from a tenant __________ 7. State income taxes owed at the end of the year __________ 8. Rent owed by a tenant but not yet collected
Identify whether each of the following transactions, which are related to expense recognition, are accrual, deferral, or neither. A. paid an expense for the current month B. prepaid an expense for future months C. made a payment to reduce accounts payable D. incurred a current-month expense, to be paid next month
Prepare journal entries to record the following adjustments: A. revenue earned but not collected, nor recorded, $14,000 B. revenue earned that had originally been collected in advance, $8,500 C. taxes due but not yet paid, $ 2,750
Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accruedrevenue, or (4) accrued expense:a. Cash received for services not yet rendered. b. Insurance paid for the next yearc. Interest revenue earned but not received.d. Salaries owed but not yet paid.
Classify the following items as (a) prepaid expense, (b) unearned revenue, (c) accrued revenue, or (d) accrued expenses. (NOTE: Type in your answer after each of the items) Eg)Paint supplies purchased in advance - prepaid expense 1)Receipts from the sale of seasons tickets for a series of concerts 2)A three-year premium paid on a fire insurance policy 3)Property taxes paid in advance 4)Life insurance premiums received by an insurance company 5)Interest owed but not yet due 6)Portion of fee earned but not yet received 7)Supplies on hand 8)Tuition collected in advance by a school 9)Interest earned but not received 10)Salary owed but not yet due 11)Taxes owed but payable in the following period 12)Receipts from the sale of meal tickets by a restaurant
Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue. a. Fees received but not yet earned. b. Fees earned but not yet received. c. Paid premium on a one-year insurance policy. d. Property tax owed to be paid beginning of next year. Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry. 1. Cash 2. Prepaid Expenses 3. Depreciation Expense 4. Accounts Payable 5. Accumulated Depreciation Yes 6. Equipment
Classify the following items as (a) accrued revenue, (b) accrued expense, (c) unearned revenue, or (d) prepaid expense:1. Bill for ads that appeared in prior month’s local newspaper.2. Fees received but not yet earned.3. Fees earned but not yet received.4. Premium paid on a one-year insurance policy.5. Rent received in advance for rental of office space.6. Supplies on hand.7. Rent paid in advance.8. Wages owed but payable in the following period.
During the year ended 30 September 20X9, H recorded the following cash transactions: (1) A payment of an annual insurance premium of $6,000. This covered the period to 31 December 20X9. (2) Receipt of $3,000 in respect of rent from a tenant covering the three-month period to 30 November 20X9. What is the impact on profit and net assets of making the year-end adjustments for deferred income and prepayments at 30 September 20X9? Profit Net assets A. Decrease of $500 Increase of $500 B. Decrease of $1,000 Increase of $1,000 C. Decrease of $500 Decrease of $500 D. Increase of $1,000 Increase of $1,000
1. Deferred revenues occur when: A. Goods or services are available B. Cash already received but not yet earned C. Expense has been incurred D. You paid it already 2. Accruals occur when: A. Goods or services are available B. Cash already received but not yet earned C. Expense has been incurred but not yet paid D. You paid it already 3. When a lessor paid an advance payment to a lessee for two years rent and records this using the expense method, what should be the credited account at year end (first year)? A. Debit cash B. Debit an expense account C. Debit a liability account D. Credit an expense account 4. When a business makes an adjusting entry at year-end with a debit to supplies, the usual credit entry is made to: A. Accounts receivable B. Cash C. Supplies expense D. Income summary 5. The adjusting entry required to record accrued liability includes:…
Which of the following is an accrued expense? a. Depreciation b. Employee's salaries c. Interest revenue d. Rental expense paid three months in advance
3. When a lessor paid an advance payment to a lessee for two years rent and records this using the expense method, what should be the credited account at year end (first year) A. Debit cash B. Debit an expense account C. Debit a liability account D. Credit an expense account
Best Company had the following items that require adjustment at year end. Cash for equipment rental in the amount of $3,800 was paid in advance. The $3,800 was debited to prepaid rent when paid. At year end, $2,950 of the prepaid rent had expired. Cash for insurance in the amount of $8,200 was paid in advance. The $8,200 was debited to prepaid insurance when paid. At year end, $1,850 of the prepaid insurance was still unused. Supplies at the beginning of the year showed a balance of $2,000. Best purchased supplies of $16,200 during the year. At the end of the year, a physical count of supplies showed $4,125 of supplies on hand. Required: 1. Prepare the adjusting journal entries needed at December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Rent Expense fill in the blank 27781a0e1020040_2 fill in the blank 27781a0e1020040_3 Prepaid Rent fill in the blank 27781a0e1020040_5 fill in the blank 27781a0e1020040_6 Dec. 31 Insurance Expense…