Chapter 3 - FAH

What is accrued revenue?

• Revenue that has been earned but not yet received

• Revenue that has been received but not yet earned

• Expenses that have been incurred but not yet paid

• Expenses paid in advance

Which of the following best describes deferred revenue?

• Revenue that has been earned and received

• Revenue that has been received but not yet earned

• Expenses that have been paid in advance

• Expenses that have been incurred but not yet paid

How are prepaid expenses reported on the balance sheet?

• As a liability

• As an expense

• As an asset

• As revenue

Which of the following is an example of an accrued expense?

• Rent paid in advance

• Salaries payable

• Unearned revenue

• Inventory

How does accrued revenue impact the income statement?

• Increases liabilities

• Increases assets

• Increases revenue

• Decreases expenses

What is another term for deferred revenue?

• Unearned revenue

• Accrued revenue

• Prepaid expense

• Accrued expense

Which of the following is an example of a prepaid expense?

• Salaries payable

• Rent paid in advance

• Interest payable

• Unearned revenue

What happens to prepaid expenses over time?

• They increase liabilities

• They convert to expenses

• They become revenue

• They increase assets

How are accrued expenses recorded in accounting?

• As a liability on the balance sheet

• As an asset on the balance sheet

• As revenue on the income statement

• As an expense on the income statement

When are deferred revenues recognized as earned?

• When payment is received

• When the service or product is delivered

• At the end of the fiscal year

• When the contract is signed