An adjusting entry for prepaid expenses affects
A) Assets and expensesRIGHT ANSWER!!!
B) Assets and incomeWRONG ANSWER
C) Liabilities and expensesWRONG ANSWER
D) Liabilities and assetsWRONG ANSWER
Adjusting entries convert cash based account into _________ based accounting
A) CapitalWRONG ANSWER
B) AssetWRONG ANSWER
C) AccrualRIGHT ANSWER!!!
D) PrepaidWRONG ANSWER
An unearned income adjusting entry affects
A) Asset and liabilitiesWRONG ANSWER
B) Cash and incomeWRONG ANSWER
C) Income and liabilitiesRIGHT ANSWER!!!
D) Cash and liabilities WRONG ANSWER
A business paid 3 month rent amounting to $3000 out of this amount one month rent pertains to the next accounting period. Identify the correct amount prepaid expense
A) $3000WRONG ANSWER
B) $1000RIGHT ANSWER!!!
C) $2000WRONG ANSWER
D) $4000WRONG ANSWER
Adjusting entries help allocating incomes and expenses to their ________
A) Cash balancesWRONG ANSWER
B) Appropriate accounting periodsRIGHT ANSWER!!!
C) Credit balancesWRONG ANSWER
D) Received or paid cash balancesWRONG ANSWER
A customer paid you $100,000 for some construction work. However, at the end of your accounting period only 1/4 of work was completed. What amount of income should be shown in income statement?
A) 100,000WRONG ANSWER
B) 50,000WRONG ANSWER
C) 10,000WRONG ANSWER
D) 25,000RIGHT ANSWER!!!
A business paid $5000 for technical services but used up the services for only $2000 until the end of its accounting period. The remaining $3000 would be referred as
A) Accrued expensesWRONG ANSWER
B) Accrued incomeWRONG ANSWER
C) Prepaid incomeWRONG ANSWER
D) Prepaid expensesRIGHT ANSWER!!!
Revenue earned but not yet received by the business is known as
A) Contra asset revenueWRONG ANSWER
B) Accrued expensesWRONG ANSWER
C) Accrued revenueRIGHT ANSWER!!!
D) Unearned revenueWRONG ANSWER
Another name of accrued revenue is
A) Outstanding assetWRONG ANSWER
B) Earned assetWRONG ANSWER
C) Unearned revenueWRONG ANSWER
D) Earned revenueRIGHT ANSWER!!!
If Rent expenses=$5000, Insurance expenses=$4000, Prepaid rent expenses=$3000. What amount of total expenses will be shown in income statement?
A) $9000WRONG ANSWER
B) $12000WRONG ANSWER
C) $8000WRONG ANSWER
D) $6000RIGHT ANSWER!!!