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Homework answers / question archive / For journal entries through 12, select the letter of the explanation that most closely describes it in the space beside each entry

For journal entries through 12, select the letter of the explanation that most closely describes it in the space beside each entry

Accounting

For journal entries through 12, select the letter of the explanation that most closely describes it in the space beside each entry. You can use letters more than once. A. To record receipt of unearned revenue. B. To record this period's earning of prior unearned revenue. C. To record payment of an accrued expense. D. To record receipt of an accrued revenue, E. To record an accrued expense. F. To record an accrued revenue. G. To record this period's use of a prepaid expense. H. To record payment of a prepaid expense. 1. To record this period's depreciation expense. Explanation Credit Entry 1 Journal Entries Cash Uneamed Professional Fees Debit 1.100 1.100 2. 3,400 Cash Interest Receivable 3.400
Explanation Credit Entry 1 Journal Entries Cash Unearned Professional Fees Debit 1,100 1,100 N 3,400 Cash Interest Receivable 3,400 3 3,900 Rent Expense Prepaid Rent 3,900 4 Interest Expense Interest Payable 4,500 4,500 5 Depreciation Expense Accumulated Depreciation 1,800 1,800 6 Unearned Professional Fees Professional Fees Eamed 4,700 4,700 7 Insurance Expense Prepaid Insurance 6,300 6,300 8 Salaries Payable Cash 5,700 5,700
Saved 6 4,700 Unearned Professional Fees Professional Fees Earned 4,700 7 Insurance Expense Prepaid Insurance 6,300 6,300 8 8 Salaries Payable Cash 5,700 5,700 9 Prepaid Rent Cash 8,600 8,600 10 Salaries Expense Salaries Payable 7,300 7,300 11 Interest Receivable Interest Revenue 1,900 1,900 12 Cash Accounts Receivable (from consulting) 1,600 1,600

 

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No Explanation Reason for choice
1 A Unearned revenue represents income that is not yet earned but there is cash received in lieu of it.
2 D Accrued revenue is income is earned but there is no cash receipt . Hence receipt of cash is an adjusting entry for income receivable
3 G Prepaid rent represents rent paid in advance and any utilization of rent this period is debited to rent expense
4 E Interest payable is credited when the interest is accumulated to be paid for the current period but is not paid
5 I Depreciation expense is recorded to charge the current year depreciation on fixed assets
6 B A credit to unearned professional fees indicates that the services against fees collected in advance have been serviced in this year. Hence the revenue is recognized.
7 G Prepaid insurance represents insurance paid in advance and any utilization of insurance this period is debited to insurance expense
8 C Salaries payable represents expense that is to be paid but not paid. Any credit to cash with a debit to salaries payable indicates that the liability is now paid
9 H Any expense paid in advance is debited to the respective prepaid expense account
10 E Accrued expense has to be paid in the current year but not paid .Hence a liability is created for payabless outstanding.
11 F Accrued incomes has to be received in the current year but not yet received .Hence a asset is created for income receivable
12 D Accrued revenue is income is earned but there is no cash receipt . Hence receipt of cash is an adjusting entry for income receivable

 

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