ADJUSTMENTS AT THE END OF ACCOUNTING PERIOD

What type of Unearned Revenues Account?

• Asset

• Liability

• Owner's Equity

• Revenues

What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses?

• Asset

• Liability

• Owner's Equity

• Expense

What type of accounts are Accumulated Depreciation and Allowance for Doubtful Accounts?

• Liability

• Owner's Equity

• Contra Asset

• Asset

Which of the following will be included in the adjusting entry to accrue interest expense?

• Debit to Cash

• Credit to Interest Payable

• Debit to Interest Payable

• Debit to Prepaid Interest

The adjusting entry that reduces the balance in Prepaid Insurance will also include which of the following?

• Credit to Cash

• Credit to Insurance Expense

• Debit to Insurance Expense

• Debit to Insurance Payable

The adjusting entry that reduces the balance in Unearned Revenues will also include which of the following?

• Debit to Cash

• Credit to Fees Earned

• Debit to Fees Earned

• Credit to Fees Receivable

The difference between total revenue and total expenses when total revenue is greater.

• adjustments
• income statement
• net income
• trial balance

Reporting income when the cash is received and expenses when the cash is paid.

• accrual basis of accounting
• cash basis of accounting
• balance sheet
• income statement

The only long-term asset that does not depreciate is:

• Land Improvements
• Land
• Building
• Trademarks

A bakery shop makes a large sale for $1,400 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The bakery shop follows GAAP and applies the revenue recognition principle. When is the $1,400 considered to be recognized?

• December 5.

• December 10.

• November 30.

• December 1.