Question 1

Athens Delivery Service is hired on October 31,2018 to perform services,beginning on November 1,2018.The delivery services will be performed for six months at a rate of $3,300 per month.Athens' fiscal year ends on December 31.What amount of service revenue should be recorded as an adjusting entry on December 31,2018?
A)$3,300
B)0
C)$6,600
D)$9,900

Accepted Answer

B)Dalton has earned revenue for November and December 2018 $3,300 × 2 = $6,600

Question 2

Dickens Services Company performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received a check by mail on January 5.Which of the following accounts should appear on the balance sheet as of December 31 as related to the services performed?
A)Prepaid Expense
B)Accounts Receivable
C)Unearned Revenue
D)None,there is no entry in December.

Accepted Answer

Accounts Receivable should appear on the balance sheet as of December 31 because the services were performed in December but the payment was not received until January, making it an outstanding receivable.

Question 3

On January 1,2017,the Accounts Receivable of Martha Company had a debit balance of $190,000.During January,the company provided services for $400,000 on account.The company collected $240,000 from its customers on account in January.What was the ending balance in the Accounts Receivable account at the end of January?
A)$160,000
B)$590,000
C)$350,000
D)$400,000

Accepted Answer

C)Ending balance as of January 31,2017,in 11ea8a75_425c_dc70_a2a1_ad8fe84a30f8_TB6701_00 Debits - Credits 11ea8a75_425c_dc71_a2a1_97686ffd8604_TB6701_00

Question 4

Accrued revenue represents the receipt of cash before the revenue has been earned.

Accepted Answer

Accrued revenue represents revenue that has been earned but has not yet been received in cash.

Question 5

A business hired a repair service to overhaul its plumbing system.The repair service began work on September 15 and completed it on October 15.The business agreed to pay the service $4,000 when the work was completed.As of September 30,the work was 50% complete,and the business made an adjusting entry to accrue repair expense as of the end of September.On October 15,the work was completed,and the repair service was paid in full.Provide the journal entry for the cash payment on October 15.(Ignore explanation).

Accepted Answer

The answer of A business hired a repair service to...

Question 6

Dress Designers Company has entered into a contract to design 10 new dresses for a customer.It will collect a total of $41,000 after the design services are complete.Dress Designers started design work on June 1.As of June 30,it finished 2 of the 10 designs.The company will make an adjusting entry at the end of June to accrue $10,250 of service revenue.

Accepted Answer

The answer of Dress Designers Company has entered into a...

Question 7

Adjusting entries may involve any account,including Cash.

Accepted Answer

Adjusting entries do not involve cash.

Question 8

Jones Financial Services Company performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received the client's check by mail on January 5.Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed?
A)Service Revenue
B)Unearned Revenue
C)Accounts Payable
D)Prepaid Expense

Accepted Answer

Service revenue should appear on the income statement for the year ended December 31 because the services were performed in December. The fact that the client's payment was received in January does not affect the recognition of revenue for the year in which the service was performed. Unearned revenue would be relevant if the client had paid in advance for services to be performed in the future, but this is not the case here. Accounts payable and prepaid expense are not relevant to this transaction.

Question 9

A business hired a repair service to overhaul its plumbing system.The repair service began work on September 15 and intends to complete it on October 15.The business will pay the repair service $4,000 when the work is completed.As of September 30,the work was 50% complete.Provide the adjusting entry to accrue repair expense by the end of September.(Ignore explanation).

Accepted Answer

The answer of A business hired a repair service to...

Question 10

West Electrical Company performed services of $8,000 on January 24 and invoiced the customer.West received the $8,000 on January 31.Provide the journal entry on January 31 when the cash was received.(Ignore explanation. )

Accepted Answer

The answer of West Electrical Company performed services of $8,000...

Question 11

Revenue that has been earned but not yet collected in cash is called a(n)________.
A)accrued revenue
B)deferred expense
C)deferred revenue
D)accrued expense

Accepted Answer

Accrued revenue refers to revenue that has been earned but not yet received in cash. This typically occurs when a company has provided goods or services to a customer but has not yet received payment for those goods or services.

Question 12

Laramie Company signed a contract with a service provider for security services at a rate of $350 per month for the period of January through June.Laramie Company will pay the service provider the entire amount at the end of June.Laramie Company makes adjusting entries each month.During the month of June,it should record total security expense of $700.

Accepted Answer

The total security expense for the month of June should be recorded as $350, not $700, as the payment is made at the end of June for the entire period from January through June. Therefore, the adjusting entry for June should be to debit Security Expense for $350 and credit Accrued Security Expense for $350.

Question 13

An adjusted trial balance does not list the revenues and expenses of a business.

Accepted Answer

An adjusted trial balance lists all the accounts.

Question 14

The accounting records of Mason Service Company include the following selected,unadjusted balances at June 30: Accounts Receivable,$2,700;Office Supplies,$1,800;Prepaid Rent,$3,600;Equipment,$15,000;Accumulated Depreciation - Equipment,$1,800;Salaries Payable,$0;Unearned Revenue,$2,400;Office Supplies Expense,$2,800;Rent Expense,$0;Salaries Expense,$15,000;Service Revenue,$40,500.
The following data developed for adjusting entries are as follows:
a.Service revenue accrued,$1,400
b.Unearned Revenue that has been earned,$800
c.Office Supplies on hand,$700
d.Salaries owed to employees,$1,800
e.One month of prepaid rent has expired,$1,200
f.Depreciation on equipment,$1,500
Journalize the adjusting entries.Omit explanations.

Accepted Answer

The answer of The accounting records of Mason Service Company...

Question 15

Luminous Electrical Company performed services of $8,000 on January 24 and invoiced the customer.Luminous received the $8,000 on January 31.Provide the journal entry on January 24 when services were performed.(Ignore explanation. )

Accepted Answer

The answer of Luminous Electrical Company performed services of $8,000...

Question 16

Accrued revenue is revenue that ________.
A)has been collected and earned
B)the business has collected in cash,but not yet earned
C)the business has earned,but not yet collected in cash
D)will be collected and earned in the future

Accepted Answer

Accrued revenue is revenue that has been earned but not yet collected in cash. Option A is incorrect because accrued revenue has not been collected yet. Option B is incorrect because revenue collected in cash is not accrued revenue. Option D is incorrect because accrued revenue has already been earned but not yet collected.

Question 17

Adjusting entries either credit a revenue account or debit an expense account.

Accepted Answer

Adjusting entries are made to ensure that the financial statements reflect the accurate financial position of the company. These entries can either credit a revenue account or debit an expense account, depending on the nature of the adjustment needed.

Question 18

Bayside Technical Services signed a contract on a six-month job for a client,starting on March 1.Bayside will collect $24,000 from its customer when the job is finished but the revenue is earned evenly over the six months.On March 31,before adjusting entries are made,Bayside's Accounts Receivable account had a debit balance of $6,000.After the March 31 monthly adjusting entry has been made,what will be the balance in Accounts Receivable?
A)Debit balance of $4,000
B)Credit balance of $20,000
C)Debit balance of $10,000
D)Debit balance of $24,000

Accepted Answer

11ea8a75_425d_2a92_a2a1_3d1965f0afd7_TB6701_00 Add Accounts Receivable of new job on March 31
 11ea8a75_425d_2a93_a2a1_eb6efc3c64ad_TB6701_00

Question 19

Adkins Company is hired on December 15,2018 to perform services,beginning on December 16,2018.Under this agreement,Adkins will earn $3,900 monthly and receive payment on January 15,2019.What amount of service revenue should be recorded for the year ending December 31,2018?
A)0
B)$1,950
C)$3,900
D)There is not enough information to answer this.

Accepted Answer

B)Allen has earned revenue from December 16 - December 31,2018.$3,900 / 2 = $1,950

Question 20

An adjusting entry that debits Accounts Receivable is an example of a(n)________.
A)deferred expense
B)accrued revenue
C)accrued expense
D)deferred revenue

Accepted Answer

An adjusting entry that debits Accounts Receivable is an example of accrued revenue. This is because the business has earned revenue, but has not yet received payment for it, and therefore, it is accrued on the books.

Quiz 3: The Adjusting Process

Dickens Services Company performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received a check by mail on January 5.Which of the following accounts should appear on the balance sheet as of December 31 as related to the services performed?

Accrued revenue represents the receipt of cash before the revenue has been earned.

Adjusting entries may involve any account,including Cash.

West Electrical Company performed services of $8,000 on January 24 and invoiced the customer.West received the $8,000 on January 31.Provide the journal entry on January 31 when the cash was received.(Ignore explanation. )

Revenue that has been earned but not yet collected in cash is called a(n) ________.

An adjusted trial balance does not list the revenues and expenses of a business.

Luminous Electrical Company performed services of $8,000 on January 24 and invoiced the customer.Luminous received the $8,000 on January 31.Provide the journal entry on January 24 when services were performed.(Ignore explanation. )

Accrued revenue is revenue that ________.

Adjusting entries either credit a revenue account or debit an expense account.

Adkins Company is hired on December 15,2018 to perform services,beginning on December 16,2018.Under this agreement,Adkins will earn $3,900 monthly and receive payment on January 15,2019.What amount of service revenue should be recorded for the year ending December 31,2018?

An adjusting entry that debits Accounts Receivable is an example of a(n) ________.