Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Revenues

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Revenues

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Multiple Choice

Which of the following is an example of an accrued revenue?

Wages owed to employees but not yet paid

Interest earned but not yet received at the end of the period

Rent collected in advance from tenants

Supplies purchased on account

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Verified step by step guidance

Understand the concept of accrued revenue: Accrued revenue refers to income that has been earned but not yet received in cash or recorded in the books by the end of the accounting period. It is recognized as revenue in the current period because the earning process is complete.

Analyze the options provided: Review each option to determine whether it fits the definition of accrued revenue.

Option 1: 'Wages owed to employees but not yet paid' - This is an example of an accrued expense, not accrued revenue, because it represents an obligation to pay employees for work already performed.

Option 2: 'Interest earned but not yet received at the end of the period' - This fits the definition of accrued revenue because the interest has been earned but not yet received in cash.

Option 3: 'Rent collected in advance from tenants' - This is an example of unearned revenue, not accrued revenue, because the cash has been received in advance for services to be provided in the future. Option 4: 'Supplies purchased on account' - This is an example of an accrued liability, not accrued revenue, as it represents an obligation to pay for supplies already received.