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

Accrued revenues are revenues that are earned in a period but are both unrecorded and not yet received in cash. Which of the following best describes accrued revenues?

Revenues that have been earned but neither recorded nor received in cash

Revenues that have been recorded but not yet earned

Revenues that have been received in cash but not yet earned

Revenues that have been recorded and received in cash

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Verified step by step guidance

Step 1: Understand the concept of accrued revenues. Accrued revenues are revenues that a company has earned during a specific period but has not yet recorded in its accounting books and has not received payment for in cash.

Step 2: Analyze the options provided in the problem. The goal is to identify the option that aligns with the definition of accrued revenues.

Step 3: Eliminate incorrect options. For example, 'Revenues that have been recorded but not yet earned' refers to unearned revenues, not accrued revenues. Similarly, 'Revenues that have been received in cash but not yet earned' also refers to unearned revenues.

Step 4: Focus on the correct description. Accrued revenues are specifically 'Revenues that have been earned but neither recorded nor received in cash,' as this matches the definition provided in Step 1.

Step 5: Confirm your understanding by reviewing the concept of accrual accounting, which ensures that revenues are recognized when earned, regardless of when cash is received or recorded.