Prepaid expenses are eventually expected to
• become expenses when their future
economic value expires.
Which of the following is considered to be unearned
revenue?
• Concert tickets sold for next month’s
performance.
Which of the following is an example of accrued
revenue?
• Swimming pool cleaning that has been provided but
has not been billed or paid.
Which of the following is considered to be an
accrued expense?
• A computer technician has installed the latest
software updates, but you have not received their
invoice for payment
Which account would normally not require an
adjusting entry?
• Smith, Capital
• debit Insurance Expense, $11,000; credit
Prepaid Insurance, $11,000
One of the accounting concepts upon which
deferrals and accruals are based is
• matching
The entry to adjust for the cost of supplies used
during the accounting period is
• Supplies Expense, debit; Supplies, credit
A business pays weekly salaries of $20,000 on
Friday for a five-day week ending on that day. The
adjusting entry necessary at the end of the fiscal
period ending on Thursday is
• debit Salary Expense, $16,000; credit
Salaries Payable, $16,000
The balance in the prepaid insurance account before
adjustment at the end of the year is $10,000. If the
additional data for the adjusting entry is (1) “the
amount of insurance expired during the year is
$8,500,” as compared to additional data stating (2)
“the amount of unexpired insurance applicable to a
future period is $1,500,” for the adjusting entry:
• the accounts and amounts would be the
