Accrued Revenues

question 2

Multiple Choice

Accrued revenues:

• A)are revenues not yet earned but have been collected or recorded.
• B)are revenues earned but not yet collected or recorded.
• C)require an adjusting entry to decreases (credits)an asset and increases (debit)a revenue.
• D)require an adjusting entry to decrease (credits)a revenue and increase (debit)a liability.

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Definitions:

Total Assets

Total assets represent the sum of everything of value owned by a company, including tangible and intangible resources, which are reported on a company's balance sheet.

Vertical Analysis

The presentation of a company’s financial statements in common-size form.

Common-Size Statements

Financial statements that present all line items as percentages of a common base figure such as total assets or sales, to allow for easy comparison.

Acid-Test Ratio

A financial metric that measures the immediate liquidity position of a company by comparing its most liquid assets (excluding inventory) against its current liabilities.