type of adjustment\nclassify the following items as (1) accrued revenue, (2) accrued expense, (3) unearned…

type of adjustment\nclassify the following items as (1) accrued revenue, (2) accrued expense, (3) unearned revenue, or (4) prepaid expense:\na. cash paid for future rent of office space\nb. fees received for future services to be performed\nc. wages owed but not yet paid\nd. services rendered for cash to be received

type of adjustment\nclassify the following items as (1) accrued revenue, (2) accrued expense, (3) unearned revenue, or (4) prepaid expense:\na. cash paid for future rent of office space\nb. fees received for future services to be performed\nc. wages owed but not yet paid\nd. services rendered for cash to be received

Answer

Brief Explanations:

  • a. Cash paid for future rent of office space: Prepaid expense. It is an expense paid in advance for a future - period benefit (using the office space).
  • b. Fees received for future services to be performed: Unearned revenue. The company has received cash but has not yet earned the revenue by providing the services.
  • c. Wages owed but not yet paid: Accrued expense. The expense (wages) has been incurred (employees have worked) but not yet paid.
  • d. Services rendered for cash to be received: Accrued revenue. The revenue has been earned (services rendered) but the cash has not yet been received.

Answer:

a. (4) prepaid expense b. (3) unearned revenue c. (2) accrued expense d. (1) accrued revenue