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 does NOT require an adjusting entry for accrued revenues at year-end?

Interest has been earned on a note receivable but not yet received.

A customer paid cash in advance for services to be performed next year.

Services have been performed but not yet billed to the client.

Rent revenue has been earned but not yet collected.

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Verified step by step guidance

Step 1: Understand the concept of accrued revenues. Accrued revenues are revenues that have been earned but not yet received in cash or recorded. Adjusting entries are required to recognize these revenues in the accounting period they are earned.

Step 2: Analyze each option provided in the problem to determine whether it involves accrued revenues and requires an adjusting entry. For example, interest earned on a note receivable but not yet received is an accrued revenue and requires an adjusting entry.

Step 3: Evaluate the option 'A customer paid cash in advance for services to be performed next year.' This transaction involves unearned revenue, not accrued revenue. Unearned revenue is a liability and does not require an adjusting entry for accrued revenues.

Step 4: Review the other options, such as 'Services have been performed but not yet billed to the client' and 'Rent revenue has been earned but not yet collected.' Both of these involve accrued revenues and require adjusting entries to recognize the earned revenue.

Step 5: Conclude that the correct answer is the option involving unearned revenue ('A customer paid cash in advance for services to be performed next year'), as it does not pertain to accrued revenues and does not require an adjusting entry for accrued revenues.