Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and accrued items.  True False

Prepaid Expenses are recorded as assets. True False

Which statement about accrual accounting is true?Group of answer choicesAn adjusting entry always involves two statement of financial position accounts.Revenue received before it is earned and expenses paid before being used or consumed are both initially recorded as liabilities.The difference between revenue received in advance and accrued revenue is that accrued revenue has been recorded and needs adjusting whereas revenue received in advance has never been recorded.None, all statements are false.

Which of the following statements is correct? Group of answer choices Adjusting entries are not necessary if the trial balance debit and credit columns balances are equal. Profit will always be greater under the cash basis of accounting than under the accrual basis of accounting. Accrued revenues are revenues that have been received but not yet earned. Asset prepayments become expenses when they expire.

Adjusting entry for accrued revenue is required when*a. cash is received for services renderedb. cash is received after the revenue is earnedc. cash is received before the revenue is earnedd. none of these

A prepaid expense occurs when a company pays in advance for a service or goods for which the benefit extends beyond the current accounting period True False