Asset, debit c. Liability, credit d. Expense, debit. Privacy Which of the following would be the best description of an accrued expense? An adjusting entry for accrued expense results in an increase to both an expense and a liability account. Which of the following describes an accrued liability? Increase expense by 41 million and no impact on the balance sheet. e. Accounts receivable is usually increased when accruing revenues. (Check all that apply.) 5) Which of the following is an example of an accrued liability? Typical accrued expenses include utility, salaries, and goods and services consumed but not yet billed. A company borrowed $4,000 from the bank at an interest rate of 9%. D. payment of accrued wages. Accrued expenses are expenses that have occurred but are not yet recorded in the company's general ledger. A. Which of the following best describes an accrued revenue? B. Accounting Financial & Managerial Accounting If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following statements describes the effect of the debit portion of the entry? Which of the following statements is true? Get more help from Chegg . Long-term liabilities.b. This means these expenses will not appear on the financial statements unless an adjusting entry is entered prior to issuing the financial statements. Increases the balance of a revenue account. See the answer. a. (You can use letters more than once.) $550 C. $350 D. $900 Question 2 of 402.5 Points The order of the steps to prepare the worksheet are … The benefit of costs which do not clearly extend beyond the accounting period is charged as expenses. Accrued revenue is a product of the revenue recognition principle which requires that revenue be recorded in the period in which it is earned. A transaction could have been completely omitted. Paid and recorded in an asset account after they are used or consumed. accounting-and-taxation; Answer: B. To record this period's use of a prepaid expense. It is an expense that has been both incurred and paid. A. Accrued expenses, also known as accrued liabilities, are expenses recognized when they are incurred but not yet paid in the accrual method of accounting. Note payable is credited. (Check all that apply) ... for the sum of all expense accounts and its balance will be transferred to the _____ (Retained Earnings/Cash) account. B. Terms taken place but the revenue has yet to be earned. Although a trial balance may prove that debits and credits are equal, errors may still exist for which of the following reasons? Interest expense is credited. Increases the balance of an expense account. For each of the following entries, enter the letter of the explanation that most closely describes..... F. To record an accrued revenue. c. Increases the balance of an asset account. In accounting, it is an expense incurred but not yet paid. Multiple Choice o An expense that is recognized prior to being paid o An expense that is paid prior to being recognized o An expense that is incurred but never paid o An expense that effects the balance sheet but not the income statement Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable. b. increase assets and increase revenues. 5) Which of the following is an example of an accrued liability? a. it is an expense that has been prepaid but not yet consumed b. it is a liability where the cash flow has taken place but the revenue has yet to be earned c. it is an expense that has been both incurred and paid d. it is an expense … The benefit of expenses which could be traced to a future period is accounted as prepaid expenses even though they are paid in the current accounting period. d. Current amounts owed to various parties excluding suppliers of inventory. Accrued revenues would appear on the balance sheet as. The following illustrates the purchase of $900 of supplies. 4. A- An expense has been incurred but not yet paid in cash. a. Adjustments involve increasing both an expense and a liability account. Office supplies purchased at the beginning of the year and debited to an expense account. The lawn maintenance… a. A. to record this periods depreciation expense B. to record accrued salaries expense. Which of the following best describes an accrued expense? Following are the treatment of accrued expenses by applying the above approach. They are reported on an income statement. The omission of the adjusting entry to record depreciation expense will result in an. a. cash is paid after expense is incurred. paid until the following pay period. Liabilities at the end of the year are understated. b. G. To record this period’s use of a prepaid expense. Operating income refers to: A. operating revenue minus operating expenses. General Motor accrued 41 million warranty expense in 2014. A business may have a warranty policy, under which it promises customers to repair or replace certain types of damage to its products within a certain number of days following the sale date. Which of the following statements describes the effect that adjustments may have on liabilities? a. B. Which of the following best describes when an accrual adjustment is required? An accrued expense is A. an expense which is recorded with the passage of time. 1. Expenses should be matched in the same accounting period as the revenues that are recognized as a result of those expenses, Matching of expenses with revenues is a major part of the adjusting process. Property taxes incurred during the year, to be paid in the first quarter of the subsequent year. C. gains minus losses. For each of the following entries, enter the letter of the explanation that most closely describes it in the space beside each entry. © 2003-2020 Chegg Inc. All rights reserved. Accrual … An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. Which of the following is the proper adjusting entry? Accrued Salaries Adjusting Entry. C. Depreciation expense. Category: Homework. This problem has been solved! To record this period’s use of a prepaid expense. which of the following describes an accrued liability? An example of an accrued expense would be A depreciation expense. ( S. O. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. C. It is an expense that has been prepaid but not yet consumed. Which of the following properly describes a deferral? D. Rent earned during the period, to be received at the end of the year. Which of the following describes accrued revenue? For each of the following entries, enter the letter of the explanation that most closely describes it in the space beside each entry. A. An amount not paid or recorded for expenses incurred. Multiple Choice o An expense that is recognized prior to being paid o An expense that is paid prior to being recognized o An expense that is incurred but never paid o An expense that effects the balance sheet but not the income statement . Experience: Cost and management accountant ( CMA) Aun Ali is online now. A revenue account with a normal credit balance. C. to . $450 B. A. Demonstrate the required adjusting entry by completing the following sentence. B … Accrued revenues would appear on the balance sheet as A. assets B. liabilities C. capital D. prepaid expenses. B. property taxes incurred during the year, to be paid in the first quarter of the subsequent year. Rent expense. a. Accrued expenses generally are taxes, utilities, wages, salaries, rent, commissions, and interest expenses that are owed. A. Accrued expense is expense which has been incurred but not yet paid. Suppliers accruals – Operating expenses for goods or … B ( S. O. At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. D. A contra expense account with a normal credit balance. At the end of period, accountants should make sure that they are properly recorded in the books of the company as an expense, with a corresponding payable account. To record receipt of unearned revenue. To record this period’s... View Answer Which of the following statements describes the expense recognition (matching) principle? Satisfied Customers: 355. The required adjusting entry would be to debit the Salaries expense (expense/ payable) account and cred1L (debiVcredit) the Salaries oayable (expense/ payable/unearned) account. statements of financial accounting concepts. Which of the following properly describes a deferral? Dr Accrued Receivables $64,000 Cr Revenue $64,000 4. It proves that debits and credits were properly entered in the ledger accounts. Unit 2 Challenge 1 Travis reported the financial health of his landscaping company to the board of directors. Current amounts owed to suppliers of inventory. Intermediate Accounting. Supplies Expense should subsequently be debited and Supplies credited for the amount used. Which of the following is an example of a variable expense? C An amount not collected and services not yet performed. Aun Ali, Teacher . Select the statements below that describe the purpose of a post-closing trial balance. Which of the following is not one of the significant purposes that the journal serves in the recording process? ~Your answer is correct. Describe the reason that accrued expenses often require adjusting entries but not in every situation. Assets and expenses will not be affected by the recording of which of the following adjusting entries? Which of the following describes the classification and normal balance of the Unearned Rent Revenue Account? ... C. accrual of bad debts expense. B. Question 1 of 402.5 Points If the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for Supplies would be _____. Debit Salaries expense for $500. To record this period's use of a prepaid expense. Which of the following is not a principal purpose of an unadjusted trial balance? A. understatement of revenues and an understatement of assets. b. A. to record this periods depreciation expense B. to record accrued salaries expense. Assets. C. to . Which of the following statements best describes the process of accounting for depreciation? Adjustments for accrued revenues . D. It is a liability where the cash flow has taken place but … B- An expense has been incurred and paid in cash. Expense and Contra asset. Which of the following statements best describes the net effect on retained earnings of the purchase and subsequent sale of treasury shares? D. Salaries and Wages Expense. D An amount collected prior to services being performed. • Read about this Challenge Which of the following is true of accrued interest on bonds that are sold between interest dates? B. revenue generated by day-to-day business activities. & b. Long-term liabilities. A. B. Accrued interest Interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. c. Current liabilities to be recognized as revenue in a future period. A rent ... enter the letter of the explanation A through F that most closely describes the entry. An amount not collected for services performed. In place of the expenditure documentation, a journal entry is created to record an accrued expense, as well as an offsetting liability (which is usually classified as a current liability in the balance sheet). 2. Interest expense as a percentage of the bond’s book value varies from period to period. Here's the rule. It is an expense that has been incurred but not yet paid. To record payment of a prepaid expense. To record payment of a prepaid expense. 33. Which of the following best describes an accrued revenue? B. Companies must account for expenses they have incurred in the past, or which will come due in the future. financial accounting standards.D. The rent written off as an expense in the Income statement for the year ended 30th June 2010 and stated as accrued on the Statement of financial position as at that date would be: Expense: £48,000; Accrued… 100% satisfaction guarantee Get all the answers you need. Depreciation Expense and Accumulated Depreciation are classified, respectively, as. Group of answer choices. | Which of the following would not be a correct form for an adjusting entry? cheery Company follows IFRS for its financial reporting. Therefore, accrued expense must be recognized in the accounting period in which it occurs rather than in the following period in which it will be paid. Examples of accrued expenses are wages expense and interest expense. B. C- An Expense Has Not Been Incurred, But Cash Has Been Paid. Which of the following correctly describes the closing process? Dr Insurance expense $1500 Cr Prepaid insurance $1500 5. Which of the following describes Sales Returns and Allowances? Customer deposits for future services. A. a debit to an asset and a credit to a liability. To record receipt of unearned revenue. Property taxes incurred during the year, to be paid in the first quarter of the subsequent year. 5. Accrued revenue—an asset on the balance sheet—is revenue that has been earned, but for which no cash has been received. An understatement of revenues and an understatement of assets. prepaid expense.D. Following each day of work, few companies take the trouble to record the equivalent amount of salary or other expense and the related liability. B. D. cash received before revenue is recognized. Accrued expenses refer to expenses that are already incurred but have not yet been paid. I. Which of the following occurs when a company records accrued interest expense on a note payable? A. b. For each of the following entries, enter the letter of the explanation that most closely describes it in the space beside each entry. Office supplies purchased at the beginning of the year and debited to an expense account. B. Example of an Accrued Expense. b. Debited c. Retained earnings 65. Net income or net loss is transferred to Retained Earnings. A type of error that a trial balance would help detect is. Which of the following is not a typical example of an accrued expense? Incurred and already paid or recorded. Chat 1:1 with a tutor Licensed Experts are available 24/7. accrued expense.C. On December 31, interest expense should be accrued for the following period: December 1 to December 31. Accounts Receivable c. Unearned Subscriptions d. Unearned Fees ANS: A DIF: Easy OBJ: 03-02 51. The failure to properly record an adjusting entry to accrue a revenue item will result in an. d. Interest payable is credited. H. To record payment of a prepaid expense. D. It is a liability where the cash flow has taken place but … Solution for Which of the following best describes Accrued Liabilities?a. B. 9. monthly expense like rent or utilities that are consumed throughout the month and paid for on first of the following month It is an expense that has been both incurred and paid. C.€It is an expense that has been prepaid but not yet consumed. 3) When an item of expense is paid and recorded in advance, it is normally called a(n)A. estimated expense.B. Ask Aun Ali Your Own Question. Supplies b. c. Cash is debited. Dr Unearned Revenue $3,500 Cr Revenue $3,500 6. A. D- An Expense Has Not Been Incurred Nor Has It Been Paid In Cash. C. Depreciation expense. Expenses… A.) An amount not collected for services performed. A. Credited. Assets being understated. Liabilities being understated. generally accepted accounting principles.C. Which of the following is an example of a prepaid expense? Common accrued expenses include: Interest expense accruals – Interest expenses that are owed but unpaid. Which of the following describes an expense? 355 Satisfied Customers. Incurred but not yet paid or recorded. B. a transposition error when transferring the debit side of journal entry to the ledger. To record this period's depreciation expense. Because accrued expenses represent a company's obligation to make future cash payments, they are shown on a company's balance sheet as … b. cash is received before revenue is earned. Accrued expenses are ordinarily reported on the balance sheet as. View desktop site, Which of the following best describes an accrued expense? Describe the final step in the adjusting process. A. Which Of The Following Best Describes An Accrued Expense? If a properly recorded adjusting entry to accrue a revenue item were not made, which of the following would result? Adjustments involve increasing both an expense account and a liability account. Which of the following describes an accrued liability?€ € A.€It is an expense that has been both incurred and paid. Travis is practicing the _____ principle. Which of the following describes an accrued expense? B. At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment. Which of the following best describes accrued liabilities? Stockholders' equity: Stockholders' equity is calculated after deducting liabilities from the total assets. The financial statements had not yet been issued for the end of the quarter, but Travis included all accounting events that had occurred after the close of the quarter. When estimating depreciation on an asset for an accounting period, it is imperative to consider: C. both the original cost of the asset and its useful life. Which of the following describes an accrued liability? Current amounts owed to suppliers of inventory.c. An example of an accrued expense would be. Cash is received before revenue is recognized. It is an expense that has been incurred but not yet paid. Dr Salaries Expense $2,400 Cr Salaries Payable $2,400 I disagree only with the fourth adjusting entry that Sandy made in … ( S. O. a. (Check all that apply.) To illustrate an accrued expense, let's assume that a company borrowed $200,000 on December 1. Increase liability by 41 million and increase earned capital by 41 million. Expense must be recorded in the accounting period in which it is incurred. B. A company prepays for Internet services for one month in advance. The unexpired insurance at the end of the fiscal period represents A. an accrued asset B. an accrued liability C. an accrued expense D. a deferred expense. in the blank space beside each adjustin entry, enter the letter of the explanation A through F that most closely describes the entry. Solution for Which of the following is not an accrued expense? Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations. d. The adjustment causes an increase in an asset account and an increase in a revenue account. C. It is an expense that has been prepaid but not yet consumed. Which of the following is an example of a non-operating expense? Expense, debit Current Liabilities: Current liabilities are a part of the total liabilities other than the long-term liabilities and they are required to be repaid within a period of one year or less. a. objectives of financial reporting.B. This results in expense on the income statement being equal to the amount of supplies used, while the remaining balance of supplies on hand is reported as an asset. Accrued liabilities are liabilities that reflect expenses that have not yet been paid or logged under accounts payable during an accounting period; in other words, a company's obligation to pay for goods and services that have been provided for which invoices have not yet been received. Depreciation. Accrued expenses are recorded in estimated amounts, which may differ from the real cash amount paid or received later. B. an expense that has been incurred but for which payment has not yet been made. It keeps complete information about changes in a specific account balance in one place. b. A. 34. An expense account with a normal debit balance. In other words, It is the total of common stock and retained earnings. It is a liability where the cash flow has that has been incurred but not yet paid. Sales revenue for a sporting goods store amounted to $215,000 for the current period. An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. Describe your issue The assistant will guide you. An accrued expense refers to when a company makes purchases on credit and enters liabilities in its general ledger, acknowledging its obligations to its creditors. Overview of Warranty Accounting. the general _________ contains transactions posted from entries in the general. After the balance sheet date, but dated as of the balance sheet date. Accrued Expenses vs. Accounts Payable: An Overview . Which of the following describes the classification and normal balance of the fees earned account? To record this period's depreciation expense. C. an expense for which cash is paid before the expense is incurred D. initially recorded as an asset. revenue recognition B.) c. cash is received after revenue is earned. Interest expense. B An amount not collected for services performed. Recording an Accrued Expense Without an adjusting entry to accrue the interest expense that was incurred by the company in December, the company's financial statements as of December 31 will not be reporting the $2,000 of interest (one-third of the $6,000) that the company has incurred in December. B. A An amount collected for services performed. Multiple Choice o An expense that is recognized prior to being paid o An expense that is paid prior to being recognized o An expense that is incurred but never paid o An expense that effects the balance sheet but not the income statement. c. They refer to revenues that are earned in a period, but have not been received and are unrecorded. Failure to record accrued interest expense would result in which of the following: a. Accrued Salaries Adjusting Entry C. Advertising expense. Which of the following describes the effect of the accrual on the financial statements? Which of the following is an example of accrued revenue? To record payment of a prepaid expense. cash expense. a. An accrued liability is recorded when an expense is incurred but not yet paid. C. To record this period’s depreciation expense… a. A process for recognizing the cost of an asset that should be matched against revenue earned as a result of using the asset. A. Which of the following best describes an accrued expense? 4) A common set of accounting standards and procedures are calledA. prepaid but not yet consumed. In place of the expenditure documentation, a journal entry is created to record an accrued expense, as well as an offsetting liability (which is usually classified as a current liability in the balance sheet ). C. A contra revenue account with a normal debit balance. B.€It is an expense that has been incurred but not yet paid. A. Calculus. Revenue, credit b.