QUICK STUDY
QS 3-1

a. To record revenue earned that was previously received as cash in advance. (UR)
b. To record annual depreciation expense. (PE)
c. To record wages expense incurred but not yet paid (nor recorded).(AE)
d. To record revenue earned but not yet billed (nor recorded). (AR)
e. To record expiration of prepaid insurance. (PE)
QS 3-9

Revenues
Earned Revenue $33,000
Total Revenues $33,000

Expenses
Company Expenses $2,250
Prepaid Expenses $3,750
Total Expenses $6,000
Cash Basis Net Income $27,000

Revenues
Earned Revenue $39,000
Total Revenues $39,000

Expenses
Company Expenses $2,250
Prepaid Expenses $3,750
Total Expenses $6,000
Accrual Basis Net Income $33,000

Exercise 3-1
A. To record this period’s depreciation expense.
B. To record accrued salaries expense.
C. To record this period’s use of a prepaid expense.
D. To record accrued interest revenue.
E. To record accrued interest expense.
F. To record the earning of previously unearned income.

_B__ 1. Salaries Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,280
Salaries Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,280
_E__ 2. Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,208
Interest Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,208
_C__ 3. Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,180
Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,180
_F__ 4. Unearned Professional Fees . . . . . . . . . . . . . . . . . . . . . 19,250
Professional Fees Earned . . . . . . . . . . . . . . . . . . . . . . 19,250
_D__ 5. Interest Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300
Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300