Using accrual accounting, expenses are recorded and reported

A$.$ when they are incurred, whether or not cash is paid

B$.$ When they are incurred and paid at the same time

C$.$ if they are paid before they are incurred

D$.$ if they are paid after they are incurred

Using accrual accounting. revenue should be recognized when a service is performed only if cash payment is received at the time of service.

A$.$ True

B$.$ False

Adjusting entries are journal entries made at the end of an accounting period for the purpose of:

A$.$ Assuring that financial statements reflect all of the revenues earned and the expenses incurred.

B$.$ Assigning expenses to the periods in which they are incurred.

C$.$ Assigning revenues to the periods in which they are earned.

D$.$ All of the above.

Adjusting entries are designed primarily to correct accounting errors.

A$.$ True

B$.$ False

Prepaid advertising, representing payment for the next quarter's advertising, would be reported on the balance sheet as a$(n)$

A$.$ asset

B$.$ liability

C$.$ contra asset

D$.$ capital

Prior to the adjusting process, accrued expenses have

A$.$ not yet been incurred, paid, or recorded

B$.$ been incurred, not paid, but have been recorded

C$.$ been incurred, not paid, and not recorded

D$.$ been paid but have not yet been incurred

The adjusting entry to record the depreciation of equipment for the fiscal period is

A$.$ debit Depreciation Expense; credit Equipment

B$.$ debit Depreciation Expense; credit Accumulated Depreciation

C$.$ debit Accumulated Depreciation; credit Depreciation Expense

D$.$ debit Equipment; credit Depreciation Expense

Unearned revenue is payment $($cash$)$ received before services have been provided. Unearned revenue is a liability.

A$.$ True

B$.$ False

The balance in the prepaid insurance account, before adjustment at the end of the year is $$4,500.$ The proper adjusting entry if the amount of prepaid insurance remaining at the end of the year for future coverage is $$1,500$ would be

A$.$ debit Insurance Expense $$4,500,$ credit Prepaid Insurance $$4,500$

B$.$ debit Insurance Expense $$3,000,$ credit Prepaid Insurance $$1,500$

C$.$ debit Prepaid Insurance $$1,500,$ credit Insurance Expense $$1,500$

D$.$ debit Insurance Expense $$3,000$ credit Prepaid Insurance $$3,000$

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