acct2301 at UT Arlington

8. Revenue Recognition

in Chapter 3 (Problem 8 of 20)

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 Closing Journal Accounts Easy
2 Adjusting Entry Identification Easy
3 Current Assets Easy
4 Revenue Journal Entry Easy
5 Revenue Recognition Easy
6 Revenue Recognition Easy
7 Determining Net Income From Transactions Moderate
8 Revenue Recognition
You are here. 		Moderate
9 Adjusting Entry - Wage Expense Moderate
10 Closing Process Moderate
11 Determining Net Income From Journal Entries Moderate
12 Adjusting Entry - Salaries Payable Moderate
13 Prepaid Rent Moderate
14 When You Forget to do Adjusting Entries Hard
15 The Effect of Transactions Hard
16 Account Classifications Hard
17 Revenue and Expense Recognition Hard
18 Adjusting Journal Entries Hard
19 Adjusting Journal Entries Hard
20 Year End Closing & Account Classification Hard
← Chapter 2

Chapter 3 Videos

1 Current Assets 9:57
2 Non-Current Assets 10:25
3 Current Liabilities 6:24
4 Non-Current Liabilites 2:00
5 The Classified Balance Sheet 4:48
6 Cash vs. Accrual Accounting 7:21
7 Expense Recognition 8:07
8 Accruals and Deferrals 15:07
9 What is an Adjusting Entry? 4:11
10 Adjusting Entry: Supplies 1:54
11 Adjusting Entry: Wages 4:52
12 Adjusting Entry: Unearned Revenue 2:11
13 Adjusting Entry: Interest 2:03
14 Contra-accounts 4:40
15 Depreciation 7:10
16 The Closing Process 10:37
Chapter 4 →