acct2013 at Mississippi State

11. Revenue Recognition

in Chapter 3 (Problem 11 of 18)

An advertising agency receives a $10,000 cash deposit from a client on February 15th for an advertising campaign which will begin in March. Which of the following statements is true for the agency (which uses accrual accounting)?

  1. A liability will be reported on the balance sheet at the end of February
  2. A prepaid asset will be reported on the balance sheet at the end of February
  3. Revenue will be recorded and reported on the income statement for February
  4. Cash from operations will be reported on the statement of cash flows in March
  5. All of the above are true
Watch Solution (1:45) Hide Solution Reveal Solution

The Rest Of The Practice Problems

Click Here to View All Chapter 3 Problems at Once View
1 Adjusting Entry Identification Easy
2 Land Purchased With Cash Easy
3 Revenue Recognition Easy
4 Revenue Recognition Easy
5 Revenue Journal Entry Easy
6 Closing Journal Accounts Easy
7 Determining Net Income From Journal Entries Moderate
8 Determining Net Income From Transactions Moderate
9 Closing Process Moderate
10 Prepaid Rent Moderate
11 Revenue Recognition
You are here. 		Moderate
12 What Should Be Journaled Moderate
13 Adjusting Journal Entries Hard
14 Adjusting Journal Entries Hard
15 Revenue and Expense Recognition Hard
16 The Effect of Transactions Hard
17 When You Forget to do Adjusting Entries Hard
18 Year End Closing & Account Classification Hard
← Chapter 2

Chapter 3 Videos

1 The Journal, Ledger, Trial Balance 14:00
2 Cash vs. Accrual Accounting 7:21
3 Expense Recognition 8:07
4 Accruals and Deferrals 15:07
5 What is an Adjusting Entry? 4:11
6 Adjusting Entry: Supplies 1:54
7 Adjusting Entry: Unearned Revenue 2:11
8 Adjusting Entry: Interest 2:03
9 Contra-accounts 4:40
10 Depreciation 7:10
11 The Closing Process 10:37
Chapter 4 →