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Basic relationships
Financial accounting final
Question | Answer |
---|---|
Prepaid expenses | Assets overstated Expenses understated |
Unearned revenues | Liabilities overstated Revenues understated |
Accrued revenues | Assets understated Revenues understated |
Accrued expenses | Expenses understated Liabilities understated |
Prepaid expenses (deferral) | Expenses paid in cash before they are used or consumed |
Unearned revenues (deferral) | Cash received before services are performed |
Accrued revenues (accrual) | Revenues for services performed but not yet received in cash or recorded |
Accrued expenses (accrual) | Expenses incurred but not yet paid in cash or recorded. |