21. Types of adjusting entries include deferral of unearned revenue, which requires the company to record a liability on the statement of financial position.
22. Revenue received before it is earned and expenses paid before being used or consumed are both initially recorded as liabilities.
23. Accrued revenues are revenues which have been received but
not
yet earned.
24. The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.
25. Accumulated Depreciation is a liability account and has a credit normal account balance.
26. A liability—revenue account relationship exists with an unearned rent revenue adjusting entry.
27. The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.
28. Unearned revenue is a prepayment that requires an adjusting entry when services are performed.
29. A contra asset account is subtracted from a related account in the statement of financial position.
30. If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future.