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72) Identify the statement below that is correct. A) When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. B) Promises of future payment by the customer are called accounts receivable. C) Increases and decreases in cash are always recorded in the owner's capital account. D) An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. E) Accrued liabilities include accounts receivable. Answer: B Difficulty: 3 Hard Topic: The Account and Its Analysis Learning Objective: 02-C2 Describe an account and its use in recording transactions. Bloom's: Apply AACSB/Accessibility: Communication / Keyboard Navigation AICPA: BB Industry; FN Decision Making 73) Unearned revenues are generally: A) Revenues that have been earned and received in cash. B) Revenues that have been earned but not yet collected in cash. C) Liabilities created when a customer pays in advance for products or services before the revenue is earned. D) Recorded as an asset in the accounting records. E) Increases to owners' capital. Answer: C Difficulty: 2 Medium Topic: The Account and Its Analysis Learning Objective: 02-C2 Describe an account and its use in recording transactions. Bloom's: Understand AACSB/Accessibility: Communication / Keyboard Navigation AICPA: BB Industry; FN Measurement 74) Unearned revenues refer to a(n): A) Asset that will be used over time. B) Expense incurred because a customer has paid in advance. C) Liability that is settled in the future when a company delivers its products or services. D) Increase in assets as a result of delivering products or services to a customer. E) Decrease in an asset. Answer: C Difficulty: 2 Medium Topic: The Account and Its Analysis Learning Objective: 02-C2 Describe an account and its use in recording transactions. Bloom's: Understand AACSB/Accessibility: Communication / Keyboard Navigation AICPA: BB Industry; FN Measurement 20 Copyright 2019 Š McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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Test Bank for Fundamental Accounting Principles 24th Edition Wild  

Fundamental Accounting Principles 24th Edition Wild Test Bank 2019 (9781259916960) (1259916960). Instant test bank download. Download from h...

Test Bank for Fundamental Accounting Principles 24th Edition Wild  

Fundamental Accounting Principles 24th Edition Wild Test Bank 2019 (9781259916960) (1259916960). Instant test bank download. Download from h...

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