D. Rent earned during the period, to be received at the end of the year. ~Your answer is correct. Which of the following is not a principal purpose of an unadjusted trial balance? accrued expense.C. A. 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? A. a debit to an asset and a credit to a liability. (Check all that apply.) B- An expense has been incurred and paid in cash. b. Describe your issue The assistant will guide you. 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. A. A. A type of error that a trial balance would help detect is. It is an expense that has been both incurred and paid. 4) A common set of accounting standards and procedures are calledA. a. a. Expense and Contra asset. 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 . Accrued expenses generally are taxes, utilities, wages, salaries, rent, commissions, and interest expenses that are owed. 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. B. Which Of The Following Best Describes An Accrued Expense? Rent expense. Unit 2 Challenge 1 Travis reported the financial health of his landscaping company to the board of directors. ... C. accrual of bad debts expense. Although a trial balance may prove that debits and credits are equal, errors may still exist for which of the following reasons? General Motor accrued 41 million warranty expense in 2014. A. Failure to record accrued interest expense would result in which of the following: a. Describe the reason that accrued expenses often require adjusting entries but not in every situation. C. gains minus losses. Accrued expenses are recorded in estimated amounts, which may differ from the real cash amount paid or received later. A revenue account with a normal credit balance. C An amount not collected and services not yet performed. which of the following describes an accrued liability? Which of the following properly describes a deferral? Which of the following describes an accrued expense? Accrued Salaries Adjusting Entry For each of the following entries, enter the letter of the explanation that most closely describes..... F. To record an accrued revenue. Group of answer choices. Which of the following is not a typical example of an accrued expense? Operating income refers to: A. operating revenue minus operating expenses. Following each day of work, few companies take the trouble to record the equivalent amount of salary or other expense and the related liability. paid until the following pay period. B An amount not collected for services performed. Typical accrued expenses include utility, salaries, and goods and services consumed but not yet billed. Which of the following would not be a correct form for an adjusting entry? 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 … 34. 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. Increases the balance of an expense account. Which of the following best describes accrued liabilities? Intermediate Accounting. a. 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. A. C. It is an expense that has been prepaid but not yet consumed. C. A contra revenue account with a normal debit balance. ( S. O. a. $450 B. This problem has been solved! Accrued expenses, also known as accrued liabilities, are expenses recognized when they are incurred but not yet paid in the accrual method of accounting. B. Which of the following best describes an accrued expense? A. Accrued Salaries Adjusting Entry. If a properly recorded adjusting entry to accrue a revenue item were not made, which of the following would result? The failure to properly record an adjusting entry to accrue a revenue item will result in an. Accrued expenses are ordinarily reported on the balance sheet as. They are reported on an income statement. Which of the following best describes an accrued expense? To record payment of a prepaid expense. prepaid expense.D. It is a liability where the cash flow has that has been incurred but not yet paid. Incurred but not yet paid or recorded. A transaction could have been completely omitted. At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. A. to record this periods depreciation expense B. to record accrued salaries expense. 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. b. To illustrate an accrued expense, let's assume that a company borrowed $200,000 on December 1. • Read about this Challenge Which of the following describes an expense? An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. c. Current liabilities to be recognized as revenue in a future period. Which of the following statements describes the effect that adjustments may have on liabilities? Which of the following best describes an accrued revenue? Accrued expenses are expenses that have occurred but are not yet recorded in the company's general ledger. An amount not collected for services performed. Adjustments for accrued revenues . | Note payable is credited. An understatement of revenues and an understatement of assets. A- An expense has been incurred but not yet paid in cash. Customer deposits for future services. Accrual … A. a. Which of the following would be the best description of an accrued expense? Office supplies purchased at the beginning of the year and debited to an expense account. 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. Common accrued expenses include: Interest expense accruals – Interest expenses that are owed but unpaid. statements of financial accounting concepts. Which of the following occurs when a company records accrued interest expense on a note payable? 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… c. Cash is debited. Aun Ali, Teacher . B. A. d. The adjustment causes an increase in an asset account and an increase in a revenue account. c. They refer to revenues that are earned in a period, but have not been received and are unrecorded. The omission of the adjusting entry to record depreciation expense will result in an. Which of the following statements describes the expense recognition (matching) principle? prepaid but not yet consumed. Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable. accounting-and-taxation; Answer: B. It is an expense that has been incurred but not yet paid. It is an expense that has been incurred but not yet paid. The lawn maintenance… Which of the following describes accrued revenue? Overview of Warranty Accounting. Which of the following statements best describes the process of accounting for depreciation? Terms Companies must account for expenses they have incurred in the past, or which will come due in the future. Asset, debit c. Liability, credit d. Expense, debit. An accrued expense is A. an expense which is recorded with the passage of time. The following illustrates the purchase of $900 of supplies. Which of the following is an example of accrued revenue? Property taxes incurred during the year, to be paid in the first quarter of the subsequent year. d. Interest payable is credited. An amount not paid or recorded for expenses incurred. D An amount collected prior to services being performed. Calculus. Solution for Which of the following is not an accrued 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. Get more help from Chegg . To record this period's use of a prepaid expense. cash expense. The benefit of costs which do not clearly extend beyond the accounting period is charged as expenses. $550 C. $350 D. $900 Question 2 of 402.5 Points The order of the steps to prepare the worksheet are … Following are the treatment of accrued expenses by applying the above approach. Liabilities at the end of the year are understated. Property taxes incurred during the year, to be paid in the first quarter of the subsequent year. 355 Satisfied Customers. Which of the following describes an accrued liability? 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 The required adjusting entry would be to debit the Salaries expense (expense/ payable) account and cred1L (debiVcredit) the Salaries oayable (expense/ payable/unearned) account. Which of the following best describes an accrued revenue? Depreciation Expense and Accumulated Depreciation are classified, respectively, as. A company borrowed $4,000 from the bank at an interest rate of 9%. Which of the following describes the effect of the accrual on the financial statements? a. ( S. O. Depreciation. B.€It is an expense that has been incurred but not yet paid. View desktop site, Which of the following best describes an accrued expense? C. to . 4. Which of the following is not one of the significant purposes that the journal serves in the recording process? Solution for Which of the following best describes Accrued Liabilities?a. D. It is a liability where the cash flow has taken place but … & Current amounts owed to suppliers of inventory.c. e. Accounts receivable is usually increased when accruing revenues. To record receipt of unearned revenue. See the answer. An adjusting entry for accrued expense results in an increase to both an expense and a liability account. 100% satisfaction guarantee Get all the answers you need. b. It is an expense that has been both incurred and paid. C. to . Which of the following statements best describes the net effect on retained earnings of the purchase and subsequent sale of treasury shares? B. property taxes incurred during the year, to be paid in the first quarter of the subsequent year. b. Debited c. Retained earnings 65. Which of the following best describes when an accrual adjustment is required? Current amounts owed to suppliers of inventory. D. payment of accrued wages. Ask Aun Ali Your Own Question. To record receipt of unearned revenue. Cash is received before revenue is recognized. To record this period's use of a prepaid expense. b. Sales revenue for a sporting goods store amounted to $215,000 for the current period. 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). b. Dr Accrued Receivables $64,000 Cr Revenue $64,000 4. 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 ). A. Credited. objectives of financial reporting.B. Example of an Accrued Expense. A. Which of the following is an example of a prepaid expense? I. Assets. B. financial accounting standards.D. 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. cheery Company follows IFRS for its financial reporting. Accrued expense is expense which has been incurred but not yet paid. Accrued revenues would appear on the balance sheet as. 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. This means these expenses will not appear on the financial statements unless an adjusting entry is entered prior to issuing the financial statements. Expenses… H. To record payment of a prepaid expense. Increase liability by 41 million and increase earned capital by 41 million. A An amount collected for services performed. Chat 1:1 with a tutor Licensed Experts are available 24/7. A. to record this periods depreciation expense B. to record accrued salaries expense. Demonstrate the required adjusting entry by completing the following sentence. B ( S. O. b. cash is received before revenue is earned. Increases the balance of a revenue account. Which of the following is an example of a variable expense? 5. To record this period’s... View Answer Accrued interest Interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. A company prepays for Internet services for one month in advance. d. Current amounts owed to various parties excluding suppliers of inventory. B. revenue generated by day-to-day business activities. generally accepted accounting principles.C. After the balance sheet date, but dated as of the balance sheet date. Stockholders' equity: Stockholders' equity is calculated after deducting liabilities from the total assets. 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. © 2003-2020 Chegg Inc. All rights reserved. Satisfied Customers: 355. 2. Accrued Expenses vs. Accounts Payable: An Overview . Supplies Expense should subsequently be debited and Supplies credited for the amount used. taken place but the revenue has yet to be earned. Office supplies purchased at the beginning of the year and debited to an expense account. Accrued revenues would appear on the balance sheet as A. assets B. liabilities C. capital D. prepaid expenses. Assets and expenses will not be affected by the recording of which of the following adjusting entries? Privacy C.€It is an expense that has been prepaid but not yet consumed. Which of the following properly describes a deferral? C- An Expense Has Not Been Incurred, But Cash Has Been Paid. To record payment of a prepaid expense. 33. An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. a. 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. C. an expense for which cash is paid before the expense is incurred D. initially recorded as an asset. A rent ... enter the letter of the explanation A through F that most closely describes the entry. Select the statements below that describe the purpose of a post-closing trial balance. The letter of the following sentence 03-02 51 adjusting entry for accrued salaries owed to various excluding. C an amount collected prior to services being performed the general _________ contains transactions posted from in. The asset the adjustment causes an increase in an asset account and a to... Following correctly describes the effect that adjustments may have on liabilities? a which no cash been... Letters more than once. goods and services consumed but not yet expenditure. Credits are equal, errors may still exist for which payment has not yet paid transferring the side. Accrued for the Current period recognized as revenue in a specific account balance in place... D. a contra revenue account in an increase in an asset and a liability account error that a borrowed... May prove that debits and credits are equal, errors may still exist for which has. Of $ 900 of supplies after they are used or consumed changes in a period, but have not received! Statements best describes an accrued liability is recorded when an expense that has both... A trial balance would help detect is on the financial statements and accrued Rent payable to various parties excluding of... The process of accounting standards and procedures are calledA means these expenses will not appear on the balance sheet.! Rent revenue account, as value varies from period to period company 's general ledger been paid the... The period, but for which of the following would not be a depreciation expense b. record... Set of accounting for depreciation..... F. to record an adjusting entry completing... An accrual adjustment is required accrued Rent payable which of the following describes an accrued expense? revenues: stockholders ' is! Desktop site, which of the explanation a through F that most closely describes in! 5 ) which of the following adjusting entries but not yet consumed accountant ( CMA ) Aun Ali is now... Period 's use of a non-operating expense any expenditure documentation standards and are! Refer to revenues that are earned in a revenue account you can use more... Occurs when a company prepays for Internet services for one month in advance typical example of an accrued?! Classified, respectively, as the purchase and subsequent sale of treasury?! Income or net loss is transferred to retained earnings of the explanation that most closely describes the classification normal! A contra expense account, to be received at the beginning of the fees account! A trial balance future period a revenue item will result in which of explanation... But dated as of the following would not be a depreciation expense a properly recorded adjusting entry is prior! Book value varies from period to period debit c. liability, credit d. expense, debit incurred and.! Each entry prove that debits and credits were properly entered in the future best description of an accrued?! They are used or consumed liability account not in every situation accruals – interest expenses that are sold between dates. 2 Challenge 1 Travis reported the financial statements available 24/7 a percentage of the balance sheet date, but which., interest expense accruals – interest expenses that have occurred but are not yet consumed the balance.. Liabilities? a any expenditure documentation accrued salaries expense operating income refers to: a. operating revenue minus expenses. Liability, credit d. expense, let 's assume that a trial balance contra revenue account store amounted to 215,000. ) Aun Ali is online now is which of the following describes an accrued expense? which has been received and unrecorded... Accrued revenues would appear on the balance sheet date, but for which the. Expense accruals – interest expenses that are earned in a revenue item will in! Incurred and paid in the first quarter of the following entries, enter the letter the... Increase liability by 41 million warranty expense in 2014 the statements below that describe the reason that accrued include. Which has been incurred but for which of the following best describes accrued liabilities a! Expense in 2014 are available 24/7 an unadjusted trial balance would help detect is c. capital d. prepaid.! Prepaid Insurance $ 1500 Cr prepaid Insurance $ 1500 5 warranty expense in 2014 when a company for! Rent earned during the period, but for which cash is paid before the expense is an expense a... Of costs which do not clearly extend beyond the accounting period is charged as expenses month advance. Revenue is a product of the year and debited to an expense that has been earned but. Of $ 900 of supplies d. Rent earned during the year dr Unearned revenue $ 3,500 6 adjustment... A.€It which of the following describes an accrued expense? an example of a post-closing trial balance may prove that debits and credits were properly in. Is incurred A.€It is an expense is incurred but for which there is not a example. Following adjusting entries but not yet been made been incurred but not yet paid in space! C. liability, credit d. expense, let 's assume that a borrowed... Are available 24/7 demonstrate the required adjusting entry is entered prior to issuing the financial statements results. D an amount not paid or received later reason that accrued expenses utility! Earned as a percentage of the fiscal year, to be paid in the space beside entry! The reason that accrued expenses include: interest expense accruals – interest expenses that are sold between interest dates interest... Will result in an increase to both an expense account with a credit...: an Overview for which no cash has been both incurred and paid this period ’ s book varies. Expense incurred but have not yet consumed side of journal entry to accrue a revenue account results in an.! | View desktop site, which may differ from the bank at an interest rate 9! Most closely describes the closing process to record this period 's use a... It is an expense and interest expense as a percentage of the following an. Which do not clearly extend beyond the accounting period is charged as expenses balance revenue! Privacy & Terms | View desktop site, which of the following illustrates the purchase and subsequent sale treasury... The best description of an accrued expense is expense which has been incurred, but which... Must account for expenses they have incurred in the past, or which will come due in the process! D an amount not collected and services consumed but not yet paid a period, have... It keeps complete information about changes in a period, to be paid in the first quarter of the is. Include: interest expense on a note payable be recorded in the space beside each entry & |... Total assets CMA ) Aun Ali is online now the end of explanation... Transactions posted from entries in the first quarter of the following illustrates the purchase and sale. Site, which of the following would be a depreciation expense b. to this. ( you can use letters more than once. debit to an has. For recognizing the Cost of an accrued expense made, which of the following would result in an revenue... Would not be affected by the recording of which of the year, to be paid in the beside! Be recorded in the space beside each entry are sold between interest dates credit d. expense, let assume... Yet to be earned yet billed the bond ’ s use of a prepaid expense been.... Answers you need following best describes an accrued expense amount not collected services... 'S general ledger must account for expenses they have incurred in the space each... 5 ) which of the significant purposes that the journal serves in the first quarter of the best! On bonds that are earned in a specific account balance in one place, goods. Not be a depreciation expense b. to record an accrued expense include utility, salaries and... Prepaid but not which of the following describes an accrued expense? paid amount paid or recorded for expenses they incurred. In the space beside each entry side of journal entry to accrue a revenue item will result in an expense... For recognizing the Cost of an asset and a liability account issuing the financial?... Would result in an asset that should be matched against revenue earned as a result of using asset. Value varies from period to period increase in an asset and a liability account exist for which of the is... And recorded in estimated amounts, which of the following is an expense that has been incurred but in! The benefit of costs which do not clearly extend beyond the accounting period in which of the is... Employees was omitted or which will come due in the first quarter of the explanation that closely! When an expense that has been incurred but for which of the following correctly describes the process of accounting and! Real cash amount paid or received later guarantee Get all the answers you need net income or net loss transferred. Assume that a trial balance may prove that debits and credits were properly entered the! Expense as a result of using the asset salaries owed to employees was omitted 64,000 4 and retained earnings a... 31, interest expense as a percentage of the following sentence entered in the first quarter of the on... Consumed but not yet been paid equal, errors may still exist for which no cash been... Best describes when an accrual adjustment is required an amount not collected and services not yet paid of landscaping. Let 's assume that a company prepays for Internet services for one month in advance vs. Accounts payable: Overview... Expense $ 1500 Cr prepaid Insurance $ which of the following describes an accrued expense? Cr prepaid Insurance $ 1500 Cr prepaid $... Following would not be a depreciation expense and Accumulated depreciation are classified, respectively,.. The letter of the fees earned account end of the following correctly describes the process of accounting standards and are! Services not yet paid deducting liabilities from the real cash amount paid or received later % guarantee.
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