Fees paid by a client this month for services to be rendered next month will be recorded as income this month.
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True or False.
1. Fees paid by a client this month for services to be rendered next month will be recorded as income this month.
2. Account titles found in the adjusted
3. Accounting includes activities such as identifying, measuring, and communicating financial information to various stakeholders.
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Solved in 2 steps
- Explain how the accounting equation organizes financial information using T-accounts and debits and credits.Which of the following is the entry to be recorded by alaw firm when it receives a payment from a new client thatwill be earned when services are provided in the future?a. Debit Accounts Receivable; credit Service Revenue.b. Debit Unearned Revenue; credit Service Revenue.c. Debit Cash; credit Unearned Revenue.d. Debit Unearned Revenue; credit CashWhat is the primary purpose of the trial balance in accounting? a. Record financial transactionsb. Verify the accuracy of accounting entriesc. Prepare financial statementsd. Budgeting and forecasting
- Identify the items from the following list that are likely to serve as source documents. Is this a Item source document? a. Invoice from supplier b. Ledger c. Statement of cash flows d. Company revenue account e. Sales receipt f. General journal g. Prepaid insurance account h. Employee time clock record i. Credit card receiptWhich journal entries is correct when a business entity collects an accounts receivable? A. Cash - debit. Accounts receivable - credit. B. Accounts receivable- debit. Service revenue - credit. C. Cash- debit. Accounts Payable- credit. D. Cash -debit. Notes payable - credit.Which of the following is correct about accounting cycle? Select one: a. A financial transaction is initiated by a source document such as a bill , receipt etc b. Accounting cycle starts with preparation of trial balance c. Financial transactions are recorded in journal in the order of value d. All of the above
- Which of the following is an example of revenue or expense to be recognized in the current period’s income statement? A)Cash received from a client before the service is provided B)Inventory purchased for sale to customers C)Cost of utilities used during the period D)Cash collected from an account receivablePosting is the process of a. Analyzing the impact of the transaction on the accounting equation. b. Obtaining information about external transactions from source documents. c. Transferring the debit and credit information from the journal to individual accounts in the general ledger. d. Listing all accounts and their balances at a particular date and showing the equality of total debits and total credits.Below are the steps in the measurement process of external transactions. Arrange them from first (1) to last (6).__________ a. Post the transaction to the T-accounts in the general ledger.__________ b. Assess whether the impact of the transaction results in a debit or credit to account balances.__________ c. Use source documents to identify accounts affected by an external transaction.__________ d. Analyze the impact of the transaction on the accounting equation.__________ e. Prepare a trial balance.__________ f. Record the transaction using debits and credits.
- Analyze routine economic events—transactions—and record their effects on acompany’s financial position using the accounting equation format.Show effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the yearIdentify which type of major accounts will cover the following and in what type of organization will such be applicable. Write your answers on the blanks. 1. Property, plant, and equipment 2. Notes payable 3. Cash 4. Accounts payable 5. Accrued expenses 6. Salaries and benefits 7. Sales 8. Inventories 9. Service income 10. Rent 11. Retained earnings 12. Accounts receivable 13. Prepaid supplies 14. Notes receivable 15. Shareholders' equity