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27) The liability created when a business collects cash from customers in advance of completing a service or delivering a product is called: a. accrued revenue. b. accrued expense. c. unearned revenue. d. prepaid expense. 28) Accrued revenue is revenue that: a. has been collected and earned. b. the business has collected in cash, but not yet earned. c. the business has earned, but not yet collected in cash. d. will be collected and earned in the future. 29) An adjusting entry that credits Salaries Payable is an example of a(n) : a. accrued expense. b. unearned revenue. c. accrued revenue. d. prepaid expense. 30) The advance cash payments of future expenses are called: a. accrued revenues. b. prepaid expenses. c. unearned revenues. d. accrued expenses. 31) On January 1,2015, the Accounts Receivable of Linda Company had a debit balance of $20,000. During January, the company provided services for $600,000 on account. The company collected $250,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January? a. $350,000 b. $620,000 c. $370,000 d. $600,000 32) Qwerty Inc. prepaid $3,600 on November 1,2014 for a oneyear insurance premium. On January 1,2015 of the next year (after December 31 adjustments), the Prepaid Insurance account will have a debit balance of: a. $3,300. b. $3,900. c. $3,600. d. $3,000. 33) On December 31,2014 , the balance in Pinnacle Exploration Company's Unearned Revenue account was a credit of $8,000. In January, 2015, the company received an advance payment of $14,000 from a new customer for services to be performed. By January 31 , adjustments had been made to recognize $7,000 of the revenue which had been earned during January. What was the balance in Unearned Revenue on January 31 , 2015 ? a. $7,000 credit b. $14,000 debit c. $8,000 credit d. $15,000 credit 34) Hank's Tax Planning Service started business in January, 2014. He rented an office for $1,800 a month starting January 1. On January 1, he prepaid the rentals through June 30.He makes accrual adjustments monthly. What is the balance in the Prepaid Rent account as of April 30 ? a. $3,600 b. $300 c. $1.800 d. $900 35) Financial statements are prepared from the balances in a(n): a. general journal. b. chart of accounts. c. unadjusted trial balance. d. adjusted trial balance. 36) Unearned Revenue is a account and carries a normal balance. a. liability; credit b. asset; credit c. revenue; debit d. asset; debit 37) What type of account is Prepaid Rent and what is its normal balance? a. expense and debit b. liability and credit c. revenue and credit d. asset and debit 38) An adjusting entry that credits Salaries Payable is an example of a(n) : a. accrued expense. b. unearned revenue. c. accrued revenue. d. prepaid expense

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