Adjusting Entries

Refer to the expenses that are already incurred, used, utilized or consumed but have not yeen been paid.

• Prepaid Expenses
• Unearned Expenses
• Accrued Expenses
• Accounts Expense

Refer to income or revenue already earned but has not yet been collected. 

• Unearned Revenue
• Accrued Income
• Prepaid Income
• Service Revenue

Represent revenue or income already collected but not yet earned; also referred to as advances from customers.

• Accrued Income
• Service Revenue
• Unearned Revenue
• Sales Revenue

Represent advance payments made for expenses which have not yet been incurred, used, utilized or consumed.

• Accrued Expenses
• Unearned Expenses
• Prepaid Expenses
• Accounts Expense

The accounting concept which states that income is recognized when earned regardless of when collected and expense is recognized when incurred regardless of when paid. 

• Matching Principle
• Time Period
• Accrual
• Deferral

Refers to the allocation of the cost of the asset over its estimated useful life.

• Consumption
• Deterioration
• Contra Asset
• Depreciation

Adjusting entries are necessary to

• Update and correct the accounts at the end of the period
• balance the books at the end of the period
• record the sales of the period
• ensure the equality of the debits and credits

It is prepared after adjusting entries are made and posted in the ledger.

• Income Statement
• Balance Sheet
• Adjusted Trial Balance
• Unadjusted Trial Balance

The adjusting entry to record an accrued expense results in which of the following types of accounts being debited and credited?

• Asset/Revenue
• Asset/Liability
• Expense/Asset
• Expense/Liability

The adjusting entry to record an accrued revenue results in which of the following types of accounts being debited and credited?

• Asset/Revenue
• Asset/Liability
• Expense/Asset
• Expense/Liability