This exercise will help you develop skill in recognizing circumstances involving accrual of revenue, accrual of expense, unearned revenue, and prepaid expense.
Instructions
Assume it is now Saturday, December 31, 2014. For each of the situations below, indicate whether (a) An accrued revenue, or (b) An accrued expense, or (c) An unearned revenue, or (d) A prepaid expense or (e) neither an accrual nor a prepayment is involved. You may use the designated letters (a), (b), (c), (d), and (e) to indicate your answers. The accounting period is the calendar year of 2014.
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