Accounting Question: Journal & Adjusting Entries, Unearned Revenue, Accrued Expenses.?

Accounting Question: Journal & Adjusting Entries, Unearned Revenue, Accrued Expenses.?
I go through all the questions I have and I’m once again stuck. Please help me on these 5 questions.

1.
The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit
A)Accounts Payable.
B)Purchase Returns and Allowances.
C)Sales.
D)Merchandise Inventory

2.
Unearned revenue is a prepayment that requires an adjusting entry when services are performed. True or False?

3.
Adjusting entries are made to ensure that:
A)expense are recognized in the period in which they are incurred.
B)revenues are recorded in the period in which they are earned.
C)balance sheet and income statement accounts have correct balances at the end of an accounting period.
D)All of the above.

4.
Accrued expenses are
A)paid and recorded in an asset account before they are used or consumed.
B)paid and recorded in an asset account after they are used or consumed.
C)incurred but not yet paid or recorded.
D)incurred and already paid or recorded.

5.
Which statement is incorrect?
A)Periodic inventory systems provide better control over inventories than perpetual inventory systems.
B)Computers and electronic scanners allow more companies to use a perpetual inventory system.
C)Freight in is debited to merchandise inventory when a perpetual inventory system is used.
D)Regardless of the inventory system that is used, companies should take a physical inventory count.

Best answer:

1) B) Purchase Returns and Allowances. (the debit would be made to Inventory)

2) Unearned revenue is a prepayment that requires an adjusting entry when services are performed. TRUE – until services are performed, unearned revenue is a liability. When services are performed, unearned revenue is debited, and revenue is credited.

3) D) All of the above

4) C) incurred but not yet paid or recorded.

5) A) Periodic inventory systems provide better control over inventories than perpetual inventory systems.

Tags: accounting, Accrued, Adjusting, Entries, Expenses., Journal, question, Revenue, Unearned

Under Forum