Prepaid expenses are the expenses that have not yet incurred and have been paid in advance while the unearned revenues are the revenues against which services are yet to be provided but the amount has been received in advance. They are parts of the accrual basis of accounting and adjusted in the financial statements at the end of the accounting year. To prepare : 1) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in balance sheet accounts. Also, to pass the adjusting entries at the end of the year. 2) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in income statement accounts. Also, to pass the adjusting entries at the end of the year. 3) Explain why the alternative sets of entries in parts 1 and 2 do not result in different financial statement accounts.

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 6BPSB

To determine

Concept Introduction:

Prepaid expenses are the expenses that have not yet incurred and have been paid in advance while the unearned revenues are the revenues against which services are yet to be provided but the amount has been received in advance. They are parts of the accrual basis of accounting and adjusted in the financial statements at the end of the accounting year.

To prepare:

1) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in balance sheet accounts. Also, to pass the adjusting entries at the end of the year.

2) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in income statement accounts. Also, to pass the adjusting entries at the end of the year.

3) Explain why the alternative sets of entries in parts 1 and 2 do not result in different financial statement accounts.

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B2 A 1 DATE VALUE X✓ fx 2 1 3 9 4 548 56 3835 40468 VALUE B C D E F G H MEASURE Current Date (TODAY) VALUE FORMULA MEASURE VALUE FORMULA Current Time (NOW) #N/A #N/A Use E6 "Problem Date" for green cells in col. E & I Cumulative full days this year #N/A Year to date fraction (YEARFRAC) #N/A Use E6 "Problem Date" for green cells in col. E & I Month to date fraction of year #N/A 10/8/2019 Day of the week #N/A 6 Problem Date 7 Year (YEAR) 8 Date Value Fractional Date Month (MONTH) 9 40468.25 Day (DAY) 10 40468.375 11 40468.625 12 13 14 15 DATE DATA CLEANUP and MANIPULATION End of month Start of month Start of next month First day of the year #N/A #N/A #N/A #N/A #N/A #N/A #N/A TIP: Use custom date format to display as the name of the day (dddd) Name of month Workdays in current month #N/A #N/A 30 workdays (excluding weekends) from today Days between today and 30 workdays from now #N/A #N/A 16 Target $2,000 17 18 DATE REVENUE MONTH DAY OF WEEK Hit Target? MONTH DAY OF WEEK FORMULAS for…

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Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 6BPSB

To determine

Concept Introduction:

Prepaid expenses are the expenses that have not yet incurred and have been paid in advance while the unearned revenues are the revenues against which services are yet to be provided but the amount has been received in advance. They are parts of the accrual basis of accounting and adjusted in the financial statements at the end of the accounting year.

To prepare:

1) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in balance sheet accounts. Also, to pass the adjusting entries at the end of the year.

2) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in income statement accounts. Also, to pass the adjusting entries at the end of the year.

3) Explain why the alternative sets of entries in parts 1 and 2 do not result in different financial statement accounts.

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Answer 3

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 6BPSB

To determine

Concept Introduction:

Prepaid expenses are the expenses that have not yet incurred and have been paid in advance while the unearned revenues are the revenues against which services are yet to be provided but the amount has been received in advance. They are parts of the accrual basis of accounting and adjusted in the financial statements at the end of the accounting year.

To prepare:

1) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in balance sheet accounts. Also, to pass the adjusting entries at the end of the year.

2) The entries for the transactions under the method that initially records the prepaid expenses and the unearned revenues in income statement accounts. Also, to pass the adjusting entries at the end of the year.

3) Explain why the alternative sets of entries in parts 1 and 2 do not result in different financial statement accounts.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

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Answer 4

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 6BPSB

To determine