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 NOT usually accounted for retrospectively as an accrued revenue adjusting entry?

Interest earned but not yet received

Sales made and cash received on the same day

Services performed but not yet billed

Rent earned but not yet collected

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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. Adjusting entries for accrued revenue are made to recognize this income in the correct accounting period.

Analyze each option provided in the question to determine whether it fits the definition of accrued revenue. For example, 'Interest earned but not yet received' is accrued revenue because the interest has been earned but not yet collected.

Evaluate the option 'Services performed but not yet billed.' This is also accrued revenue because the service has been provided, but the billing and collection have not yet occurred.

Consider the option 'Rent earned but not yet collected.' This is accrued revenue as well, since the rent has been earned but not yet received in cash.

Finally, examine the option 'Sales made and cash received on the same day.' This does NOT fit the definition of accrued revenue because the revenue and cash collection occur simultaneously, meaning no adjustment is needed to account for it retrospectively.