11) Unearned Service Revenue is a revenue account.
12) The adjusting entry to recognize unpaid salaries that are owed increases net income and increases liabilities.
13) Every adjusting entry must affect both the income statement and the balance sheet.
14) The following accounts are up-to-date and need no adjustment at the end of the period:
A) Cash, Common Stock and Prepaid Rent.
B) Prepaid Rent, Supplies and Unearned Rent Revenue.
C) Cash, Land and Common Stock.
D) Cash, Dividends and Unearned Rent Revenue.
15) Adjusting entries:
A) close the revenue accounts.
B) close the expense accounts.
C) adjust Cash.
D) adjust Unearned Revenue.
16) Adjusting entries:
A) are needed for all balance sheet accounts.
B) must be made on a daily basis to record supplies used during that day.
C) are needed because errors have been made in previous journal entries.
D) are made before the financial statements can be prepared.
17) Prepaid expenses will:
A) become expenses when their future benefits expire.
B) become revenues when their future benefits expire.
C) become liabilities when their future benefits expire.
D) become assets when their future benefits expire.
18) ________ is the allocation of the cost of an asset over the asset's useful life.
A) Accrual
B) Deferral
C) Depreciation
D) Expiration
19) ________ will be increased when a company receives cash before performing the services.
A) Service Revenue
B) Accumulated Depreciation
C) Unearned Service Revenue
D) Accrued Salaries Payable
20) The book value of a plant asset is the:
A) accumulated depreciation less the cost of the asset.
B) cost of the asset.
C) balance in the accumulated depreciation account.
D) cost of the asset less the accumulated depreciation.