Exam 3: Accrual Accounting Concepts

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

Deferred revenues (unearned revenues)are items initially recorded as liabilities,but expected to become over time.

Receiving cash in advance of performing a service creates a liability for the company.

"Brand name" recognition is an example of goodwill.

Identify the type of adjustment necessary (the type of item involved)and record the transaction for the event.Make sure to include the ending balances after adjustment.

Rights that are short-term in nature are called intangible assets.

Accrued revenues would appear on the balance sheet as:

Liabilities that will not be due for more that one year are called long-term liabilities.

Under accrual accounting,expenses are recorded when incurred regardless of when paid.

Deferred expenses (prepaid expenses)are items initially recorded as assets but are expected to become over time.

An adjusting entry would adjust revenue so that it is reported when earned and not when cash is received.

UNI Co.received $1,000 advance from Newbie as rent for the use of a building owned by UNI.How does this transaction affect UNI's accounts if UNI recognizes a liability?

At the end of the fiscal year,the following adjusting entries were omitted:

Using accrual accounting,revenue is recorded and reported only:

Describe deferrals and accruals.