Try to answer this theoretical question. This is under basic accounting for a service concern businesss; some rules may vary from advanced or higher accounting. Don't worry, explanations will be given later.
True or False!
1. Adjusting entries is a required step in the accounting cycle.
2. If an entity credits a liability account when given a payment before rendering a service, the adjusting entry would debit liability and credit an income account in the amount of the earned portion.
3. An unearned rent income is an example of a deferred debit.
4. Adjusting entries and correcting entries are essentially the same.
5. Precollected income is income already collected but not yet earned.
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