Summary of Timing Issues Related to Adjusting Entries ACCOUNTING

Homework - Accounting –

See chart below and use to answer all questions. Look at the “ before ” and “ after ” words for each Account Category: and select the correct statement below:

Summary of Timing Issues Related to Adjusting Entries
Account Category	Examples	When does Cash Flow?	When is the Adjusting Entry made, and when is Revenue or Expense Recognized?
Property, Plant, & Equipment	Equipment Building	Cash flow out: before the adj. entry before expense is recognized	Adjusting entry made after cash flow out. Expense is recognized after cash flow out
Prepaid Assets	Prepaid rent Supplies	Cash flow out: after the adj. entry after expense is recognized	Adjusting entry made before cash flow out. Expense is recognized before cash flow out
Accrued liabilities	Wages payable Interest payable	Cash flow out: after the adj. entry before expense is recognized	Adjustingentry made before cash flow out. Expense is recognized after cash flow out
Unearned Revenue Liabilities	Receive advance: payment for services payment for rent	Cash flow in: after the adj. entry after revenue is recognized	Adjusting entry made before cash flow in. Revenue is recognized before cash flow in
Accrued Assets	interest receivable unbilled services	Cash flow in: after the adj. entry after revenue is recognized	Adjusting entry made before cash flow in. Revenue is recognized before cash flow in

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Question 1

 Property, Plant, & Equipment, (example Equipment or Buildings)          

A. All of the “ before ” and “ after ” words are correct.

B. All of the “ before ” and “ after ” words are incorrect.

C. Some of the “before ” and “ after ” words are correct and some of the “ before ” and “ after ” words are incorrecBottom of Form

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Question 2

Prepaid Assets, (examples Prepaid Rent, Supplies)

A. All of the “ before ” and “ after ” words are correct.

B. All of the “ before ” and “ after ” words are incorrect.

C. Some of the “ before ” and “ after ” words are correct and some of the “ before ” and “ after ” words are incorrectBottom of Form

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Question 3

Accrued Liabilities, (examples wages payable, interest payable)

A. All of the “ before ” and “ after ” words are correct.

B. All of the “ before ” and “ after ” words are incorrect.

C. Some of the “ before ” and “ after ” words are correct and some of the “ before ” and “ after ” words are incorrectBottom of Form

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Question 4

Unearned Revenue Liabilities, : (examples Receive Advance Payment for Services or Rent)

A. All of the “ before ” and “ after ” words are correct.

B. All of the “ before ” and “ after ” words are incorrect.

C. Some of the “ before ” and “ after ” words are correct and some of the “ before ” and “ after ” words are incorrecBottom of Formt

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Question 5

Accrued Assets,

A. All of the “ before ” and “ after ” words are correct.

B. All of the “ before ” and “ after ” words are incorrect.

C. Some of the “ before ” and “ after ” words are correct and some of the “before ” and “ after ” words are incorrect.Bottom of Form

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