1. Unearned revenues are generally:

a. Revenues that have been earned and received in cash.

b. Revenues that have been earned but not yet collected in cash.

c. Liabilities created when a customer pays in advance for products or services before the revenue is earned.

d. Recorded as an asset in the accounting records.

e. Increases to stockholders equity.

2.Which of the following does not require an adjusting entry at year-end?

a. Accrued interest on notes payable.

b. Supplies used during the period.

c. Cash invested by stockholder.

d. Accrued wages.

e. Expired portion of prepaid insurance.

3. Which of the following statements is incorrect?

a. Working papers are useful aids in the accounting process.

b. On the work sheet, the effects of the accounting adjustments are shown on the account balances.

c. After the work sheet is completed, it can be used to help prepare the financial statements.

d. On the work sheet, the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance.

e.A worksheet is not a substitute for financial statements.