Chapter 2 Accrued Revenue
When revenue is accrued, cash is received _______ the revenue is recognized.
after
Interest receivable is a(n) _________ account.
asset
Entries to Accrue Revenue Asset Account XXX (____________________) Revenue Account XXX (____________________________)
Balance Sheet / Income Statement
Accrue commission revenue earned of $1400
DR Commission receivable $1400 CR Commission revenue $1400
Your company holds Duco's $60,000, 12% mortgage on which it has collected $7,000 in interest for the year. What adjusting entry do you record at year end?
DR Interest Receivable $200 CR Interest Revenue $200
Your company holds a $50,000, 8% note receivable, interest payable annually on each June 30th. When your company's fiscal year ends on December 31, 20X5, you have received no interest payment since June 30, 20X5. What adjusting journal entry do you make?
DR Interest Receivable $2000 CR Interest Revenue $2000
Your company holds a $50,000, 8% note receivable, interest payable annually on each June 30th. When your company's fiscal year ends on August 31, 20X5, you have received no interest payment since June 30, 20X5. What adjusting journal entry do you make?
DR Interest Receivable $667 CR Interest Revenue $667
Your company has a 60 day, $3000, 12% note dated December 1. What adjusting entry do you record on December 31 if you have received no interest payments?
DR Interest receivable $30 CR Interest Revenue $30
Accrue interest revenue of $400
DR Interest receivable $400 CR Interest revenue $400
Your company rents a machine to another company at an annual rental of $15,000. At year end, you have received $13,500 in rent. Record the adjusting entry.
DR Rent Receivable $1500 CR Rent Revenue $1500
Accrue rental revenue of $2400
DR Rent receivable $2400 CR Rent revenue $2400
Interest receivable appears on the ___________________________ financial statement.
balance sheet
The adjusting entry to accrue revenue _______________ affect the ledger Cash account.
does not
Accrued revenue is revenue _________ but not ______________.
earned / received
Accrued revenue is revenue _________ for goods or services delivered for which no cash has been ______________.
earned / received
Accrued revenue is revenue _______________ but not ____________________.
earned / received
A company omitted its adjusting entry to accrue rental revenue. What effect does this have on liabilities at year end?
none
The adjusting journal entry to accrue revenue debits a(n) _____________ account and credits a(n) _________________ account.
receivable / revenue
If you omit the adjusting journal entry to accrue revenue, you ____________________ your firm's net income.
understate
If you fail to record the adjusting entry to accrue revenue, it will affect the income statement as follows: Net Income will be ______________________________. Revenue will be ___________________________.
understated / understated