Quiz AC-8 - 11. Question: An unearned revenue is disclosed...

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11. Question: An unearned revenue is disclosed in the financial statements as a(n) __________. Your Answer: asset ( Incorrect. ) liability ( CORRECT. The corporation has an obligation or liability to fulfill the earnings process for the amount received in advance. ) CORRECT revenue ( Incorrect. The word "unearned," means, of course, that the earnings process has not yet been completed. Since this is one of the revenue recognition criteria, a revenue is not recorded. ) expense ( Incorrect. The word "unearned" implies that the entity has an obligation to fulfill the earnings process. ) Instructor Explanation: Focus on the meaning of the word "unearned." Points Received: 1 of 1 Comments: 12. Question: A balance sheet that divides both assets and liabilities into groups on a meaningful basis is generally referred to as __________. Your Answer: classified ( CORRECT. The sectioning of the major components of the balance sheet in a meaningful manner is referred to as classification. ) CORRECT categorized ( Incorrect. Although this modifier could possibly be used to indicate the grouping, the term "classified" has gained general acceptance. ) segmented ( Incorrect. Although this modifier could possibly be used to indicate the grouping, the term "classified" has gained general acceptance. ) partitioned ( Incorrect. Although this modifier could possibly be used to indicate the grouping, the term "classified" has gained general acceptance. ) sectioned ( Incorrect. Although this modifier could possibly be used to indicate the grouping, the term "classified" has gained general acceptance. ) Points Received: 1 of 1 Comments: 13. Question: Which of the following transactions listed below is not considered to be an adjusting entry? Your Answer: Cash is paid to satisfy a current liability. ( CORRECT. This is an example of a cash disbursement, which is considered to be an explicit transaction. ) CORRECT Prepaid rent is decreased at the end of the month ( Incorrect. This is one of the basic types of implicit transactions. ) Accounts Receivable is ( Incorrect. This is one of the basic types of
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recorded for jobs partially completed. implicit transactions. )
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This note was uploaded on 06/20/2010 for the course FINA 6266 taught by Professor Burt during the Spring '10 term at University of Arkansas for Medical Sciences.

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Quiz AC-8 - 11. Question: An unearned revenue is disclosed...

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