Accruals & Deferrals

Question 1

Prepaid Expenses Examples

Answer 1

Insurance
Supplies
Advertising
Rent
Depreciation

Question 2

Prepaid Expenses Reason For Adjustment

Answer 2

Prepaid expenses originally recorded in asset accounts have been used

Question 3

Prepaid Expenses

Answer 3

Assets Overstated
Expenses Understated

Debit Expenses
Credit Assets or Contra Assets

Question 4

Unearned Revenues Exampes

Answer 4

Rent
Magazine Subscriptions
Customer Deposits for Future Service

Question 5

Unearned Revenues Reason for Adjustment

Answer 5

Unearned revenues recorded in liability accounts are now recognized as revenue for services performed

Question 6

Unearned Revenues

Answer 6

Liabilities Overstated
Revenues Understated

Debit Liabilities
Credit Revenues

Question 7

Accrued Revenues Examples

Answer 7

Interest
Rent
Services

Question 8

Accrued Revenues Reason For Adjustment

Answer 8

Services performed but not yet received cash or recorded

Question 9

Accrued Revenues

Answer 9

Assets Understated
Revenues Understated

Debit Assets
Credit Revenues

Question 10

Accrued Expenses Examples

Answer 10

Interest
Rent
Salaries

Question 11

Accrued Expenses Reason For Adjustment

Answer 11

Expenses have been incurred but not yet paid in cash or recorded

Question 12

Accrued Expenses

Answer 12

Expenses Understated
Liabilities Understated

Debit Expenses
Credit Liabilities