Indicate by the letter "T" or the letter "F" whether each of the following statements is true or false: -1. 12. Under the cash basis of accounting, revenues and expenses are reported in the period in which cash is actually received or paid. The accrual basis of accounting requires revenue to be recorded when services are provided to customers without regard to whether or not the cash has been received. Prepaid items usually do not need to be adjusted at the end of an accounting period. An adjusting entry would adjust an expense account so the expense is reported when incurred. E 3. 4. _5. The systematic allocation of a fixed asset's cost to expense is called depreciation. 6. If a building is purchased for $50,000, and annual depreciation on the building is 7. 8. Adjusting entries are needed to bring account balances up to date at the end of arn 9. $2,000, the book value of the building one year later would be $52,000. Unearned Fees is a liability account that does not usually require adjustment at the end of the year. accounting period. Assets used in a business that are of a relatively fixed or permanent nature are called current assets. 10. Accumulated Depreciation is an expense account with a debit balance. 11. The only fixed asset that is not depreciated is Computers, since they change and become outdated so often. 12. Unbilled fees means the same thing as Accounts Receivable. 13. Unexpired insurance means the same thing as Insurance Expense. 14. Supplies on hand means the same thing as Supplies Expense. 15. After all accounts have been adjusted and posted to the ledger, the next step in the accounting cycle is to prepare an Adjusted Trial Balance