Adjustment at the end of accounting period

The prepaid insurance account must be adjusted at the end of accounting period because the account balance does not reflect the value of the insurance that expired during the period.

• True

• False

Two accounts used in adjusting office supplies are Office Supplies and Supplies Inventory.

• True

• False

The value of the insurance coverage used is recorded as a debit to Insurance Expense.

• True

• False

Which of the following accounts would not require an adjustment?

• Accounts receivable

• Prepaid insurance

• Rental revenue

To adjust for Prepaid Insurance, what account would you debit?

• Prepaid Insurance

• Cash

• Insurance Expense

• Unearned income

Journal entries recorded to update general ledger accounts at the end of accounting period are called

• recorded entries

• closing entries

• updated entries

• adjusting entries

Expenses incurred but not yet paid or recorded are called

• prepaid expenses.

• accrued expenses.

• interim expenses.

• unearned expenses.

Prepaid expenses are

• incurred but not yet paid or recorded.

• paid and recorded in an asset account after they are used or consumed.

• paid and recorded in an asset account before they are used or consumed.

• incurred and already paid or recorded.

Unearned revenues are

• revenues for services already performed, and recorded as liabilities, before they are received.

• revenues not recorded as revenues until services are performed.

• revenues for services performed but not yet received in cash or recorded.

• Revenues for services already performed and received in cash, and recorded as revenues when received.

Depreciation expense for a period is the

• portion of an asset’s cost that expired during the period.

• original cost of an asset – accumulated depreciation.

• book value of the asset ÷ useful life.

• market value of the asset ÷ useful life