Accounting 200 - Chapter 4 Final Exam with Solved Solutions.

Define Cash basis of accounting - Answer records revenues when cash is received and records expenses when cash is paid Define accrual basis of acounting - Answer records revenues when they are earned and records expenses when they are incurred What type of accounting does GAAP require? - Answer accrural What are adjusting journal entries - Answer entries made in general journal to record revenues that have been earned but not recorded and expenses that have been incurred but not recorded Cash is received before revenue is earned is known as what? - Answer Deferred Revenue Define Accrued Revenue - Answer Cash is received after revenue is earned Define Deferred Expense - Answer Cash is paid before expense is incurred Cash is paid after the expense is incurred is known as - Answer Accrued Expenses What type of journal entry is this situation: A company sells 12-moth subscriptions to its monthly magazine. On october 1, the company receives a total of $1200 for 20 subscriptinos - Answer Deferred Revenue What type of journal entry is this situation: Cash is debited and Unearned revenue is credited - Answer Deferred Revenue What type of journal entry is this: Unearned revenue is debited and Service Revenue is credited - Answer Deferred Revenue