1. Using accrual accounting, revenues are recorded
a. when cash is received without regard to when the services are performed or products have been delivered to customers.
b. when a service has been performed or products have been delivered to customers without regard to when cash is received.
c. when cash is received at the time services are performed or products have been delivered to customers only if cash is received.
d.after the services are performed or products have been delivered to customers.

2. Deferred revenue is revenue that is
a. earned and the cash has been received.
b. earned but the cash has not been received.
c. not earned and the cash has not been received.
d. not earned but the cash has been received.

3. Adjusting entries always include
a. only income statement accounts.
b. only balance sheet accounts the cash account.
c. at least one income statement account and one balance sheet account.

4. Which of the following is considered to be an accrued expense?
a. a computer technician has installed the latest software updates and was paid on the same day
b. a computer technician has been paid in advance to install software updates as they become available
c. a computer technician has just signed an agreement with you regarding pricing for future work
d. a computer technician has installed the latest software updates, but you have not received an invoice or made payment

Question

1. Using accrual accounting, revenues are recorded
a. when cash is received without regard to when the services are performed or products have been delivered to customers.
b. when a service has been performed or products have been delivered to customers without regard to when cash is received.
c. when cash is received at the time services are performed or products have been delivered to customers only if cash is received.
d.after the services are performed or products have been delivered to customers.
 
2. Deferred revenue is revenue that is
a. earned and the cash has been received.
b. earned but the cash has not been received.
c. not earned and the cash has not been received.
d. not earned but the cash has been received.
 
3. Adjusting entries always include
a. only income statement accounts.
b. only balance sheet accounts the cash account.
c. at least one income statement account and one balance sheet account.
 
4. Which of the following is considered to be an accrued expense?
a. a computer technician has installed the latest software updates and was paid on the same day
b. a computer technician has been paid in advance to install software updates as they become available
c. a computer technician has just signed an agreement with you regarding pricing for future work
d. a computer technician has installed the latest software updates, but you have not received an invoice or made payment

	Debits		Credits
Cash	$4,795	Accumulated depreciation	$1,000
Accounts Receivable	2,320	Accounts Payable	6,800
Supplies	1,000	Unearned Service Revenue	400
Equipment	40,000	Salaries Payable	550
		Common Stock	11,000
		Retained Earnings	28,365
	$48,115		$48,115

Nov. 8	Paid $1,150 for salaries due employees, of which $550 is forOctober salaries payable and $600 is for November.
10	Received $1,400 cash from customers in payment of account.
11	Purchased merchandise on account from Midwest Wholesale Supplyfor $6,000, terms 2/10, n/30.
12	Sold merchandise on account for $4,500, terms 2/10, n/30. Thecost of the merchandise sold was $3,000.
15	Received credit from Midwest Wholesale Supply for merchandisereturned $200.
19	Received collections in full, less discounts, from customersbilled on sales of $4,500 on November 12.
20	Paid Midwest Wholesale Supply in full, less discount. (Donâtforget the return on the 15^th.)
22	Received $1,300 cash for services performed in November.
25	Purchased equipment on account $3,000.
27	Purchased supplies on account $1,300.
28	Paid creditors $2,500 of accounts payable due.
29	Paid November rent $300.
29	Paid salaries $1,100.
29	Performed services on account and billed customers for servicesprovided $1,900.
29	Received $550 from customers for services to be provided in thefuture.

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1.	Supplies on hand are valued at $1,600.
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