Chapter 3—The Adjusting Process

MULTIPLE CHOICE
51.Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's
balance sheet as a(n)
a asset
.
b liability
.
c capital account
.
d revenue
.
ANS: B PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-09-Financial Statements

52. Accrued expenses are ordinarily reported on the balance sheet as

a assets
.
b liabilities
.
c fixed assets
.
d prepaid expenses
.
ANS: B PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-09-Financial Statements

53. Fees receivable would appear on the balance sheet as a(n)

a asset
.
b liability
.
c fixed asset
.
d unearned revenue
.
ANS: A PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-09-Financial Statements

54. The general term used to indicate delaying the recognition of an expense already paid or of a revenue
already received is
a depreciation
.
b deferral
.
c accrual
.
 d inventory
.
ANS: B PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-04-Cash vs. Accrual

55. The adjusting entry for rent earned that is currently recorded in the unearned rent account is
a debit Unearned Rent; credit Rent Revenue
.
b debit Rent Revenue; credit Unearned Rent
.
c debit Unearned Rent; credit Prepaid Rent
.
d debit Rent Expense; credit Unearned Rent
.
ANS: A PTS: 1 DIF: Moderate OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-07-Adjusting Entries