Question

Adjusting entries affect at least one balance sheet account and at least one income statement account. For the entries below, identify the account to be debited and the account to be credited. Indicate which of the accounts is the income statement account and which is the balance sheet account. Assume the company records prepayments of expenses in asset accounts, and cash receipts of unearned revenues in liability accounts. a. Entry to record revenue earned that was previously received as cash in advance. b. Entry to record revenue earned but not yet billed (nor recorded). c. Entry to record annual depreciation expense. d. Entry to record interest revenue earned but not yet collected (nor recorded). e. To record janitorial expense incurred but not yet paid. Account Title Financial Statement Accounts a. Account to be debited Account to be credited b. Account to be debited Account to be credited Account to be debited Account to be credited d. Account to be debited Account to be credited e. Account to be debited Account to be credited

Answer 1

S No Accounts Account title Financial Statement Remarks a Account to be debited Unearned Revenue Balance Sheet - Liability account Account to be credited Revenue account Income Statement b Account to be debited Accrued Revenue Balance Sheet - Asset account Account to be credited Revenue account Income Statement c Account to be debited Depreciation expense Income Statement Account to be credited Accumulated Depreciation Balance Sheet - Liability account d Account to be debited Accrued Interest Balance Sheet - Asset account Account to be credited Interest revenue Income Statement e Account to be debited Janitorial expenses Income Statement Account to be credited Accounts Payable/Accrued expenses Balance Sheet - Liability account If invoice has been received then credit "Accounts Payable" otherwise "Accrued expenses"