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 accrued revenue?

Rent collected in advance from tenants

Wages owed to employees but not yet paid

Supplies purchased on account

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

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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 accounts by the end of the accounting period. It is recognized as revenue in the financial statements even though the cash has not been collected.

Analyze the options provided: Each option represents a different type of transaction. Determine whether the transaction involves revenue that has been earned but not yet received.

Option 1: 'Rent collected in advance from tenants' represents unearned revenue, not accrued revenue. This is because the cash has been received, but the revenue has not yet been earned.

Option 2: 'Wages owed to employees but not yet paid' represents accrued expenses, not accrued revenue. This is a liability for the company, as it owes money to employees.

Option 3: 'Supplies purchased on account' represents accounts payable, not accrued revenue. This is a liability for the company, as it owes money for supplies purchased. The correct example of accrued revenue is 'Interest earned but not yet received at the end of the period,' as the interest has been earned but the cash has not been received.