Deck 21: Accruals, Deferrals, and Reversing Entries

Question 1

To record revenue that has been received but not yet earned, an entry is made that increases a liability account.

Answer 1

True

Question 2

An expense that is paid in advance is recorded as an asset until the expense is incurred.

Answer 2

True

Question 3

The reversing entry for accrued interest expense increases the balance of Interest Payable.

Answer 3

False

Question 4

The adjusting entry for deferred rent income results in a debit to Rent Income.

Question 5

The reversing entry for accrued interest income increases the balance of Interest Receivable.

Question 6

After adjustments at the end of a fiscal period, the balance in Unearned Rent Income represents the rent still unearned.

Question 7

Accounting procedures require that revenue and expenses be recorded in the accounting period in which revenue is earned and expenses are incurred.

Question 8

After adjustments at the end of a fiscal period, the balance in Prepaid Rent represents the amount of rent expense for the current fiscal period.

Question 9

The entry to journalize the reversing entry for accrued interest expense is

A) debit Income Summary; credit Interest Expense.
B) debit Interest Payable; credit Income Summary.
C) debit Interest Expense; credit Income Summary.
D) debit Interest Payable; credit Interest Expense.

Question 10

The adjusting entry for accrued interest expense is

A) debit Interest Payable; credit Interest Expense.
B) debit Interest Expense; credit Interest Payable.
C) debit Interest Expense; credit Income Summary.
D) debit Income Summary; credit Interest Expense.

Question 11

An adjusting entry normally is reversed if the adjusting entry creates a balance in

A) a revenue or expense account.
B) a revenue and liability account.
C) an expense and asset account.
D) an asset or liability account.

Question 12

The entry to journalize the adjusting entry for unearned rent revenue that has now been earned is

A) debit Rent Income; credit Unearned Rent Income.
B) debit Unearned Rent Income; credit Income Summary.
C) debit Income Summary; credit Unearned Rent Income.
D) debit Unearned Rent Income; credit Rent Income.

Question 13

When reversing entries are used and a note payable that was signed in a previous fiscal period is paid,

A) Interest Payable is credited for the amount of interest incurred in the current fiscal year.
B) Interest Payable is credited for the total amount of interest incurred during the full term of the note.
C) Interest Expense is debited for the amount of interest incurred in the current fiscal year.
D) Interest Expense is debited for the total amount of interest incurred during the full term of the note.

Question 14

The adjusting entry for prepaid rent is

A) debit Income Summary; credit Rent Expense.
B) debit Rent Expense; credit Income Summary.
C) debit Rent Income; credit Prepaid Rent.
D) debit Rent Expense; credit Prepaid Rent.

Question 15

The entry to journalize an adjusting entry for interest income is

A) debit Income Summary; credit Interest Income.
B) debit Interest Income; credit Income Summary.
C) debit Interest Income; credit Interest Receivable.
D) debit Interest Receivable; credit Interest Income.

Question 16

The closing entry for interest income is

A) debit Income Summary; credit Interest Income.
B) debit Interest Income; credit Income Summary.
C) debit Interest Income; credit Interest Receivable.
D) debit Interest Receivable; credit Interest Income.

Question 17

Select the one term that best fits each definition

-Expenses incurred in one fiscal period but not paid until a later fiscal period.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry

Question 18

Select the one term that best fits each definition

-Payments for goods or services which have not yet been received.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry

Question 19

Select the one term that best fits each definition

-An entry made at the beginning of one fiscal period to reverse an adjusting entry made in the previous fiscal period.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry

Question 20

Select the one term that best fits each definition

-An entry recording revenue before the cash is received, or an expense before the cash is paid.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry

Question 21

Select the one term that best fits each definition

-Cash received for goods or services which have not yet been provided.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry

Question 22

Select the one term that best fits each definition

-Interest incurred but not yet paid.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry

Question 23

Select the one term that best fits each definition

-An entry recording the receipt of cash before the related revenue is earned, or payment of cash before the related expense is incurred.

A) accrual
B) accrued interest expense
C) accrued expenses
D) deferral
E) deferred expenses
F) deferred revenue
G) reversing entry