Asked by Keilan Harris on Jul 12, 2024
Verified
Which of the following pairs of accounts could not appear in the same adjusting entry?
A) Fees Earned and Unearned Fees
B) Interest Income and Interest Expense
C) Rent Expense and Prepaid Rent
D) Salaries Payable and Salaries Expense
Adjusting Entry
A journal entry made in accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.
Fees Earned
Income received from providing services, a form of revenue for professionals and businesses engaged in service activities.
Interest Income
Revenue earned from the investment of funds in interest-bearing accounts or securities, such as bonds or savings accounts.
- Attain an understanding of the process and implications involved in adjusting entries during the accounting cycle.
- Distinguish and organize distinct varieties of accounts (assets, liabilities, revenues, expenses) and their influences on financial declarations.
Verified Answer
KH
Kayla HendersonJul 14, 2024
Final Answer :
B
Explanation :
Adjusting entries are made to record internal transactions that are not initiated by an external transaction. They typically involve one income statement account (revenue or expense) and one balance sheet account (asset or liability). Interest Income and Interest Expense represent two different types of transactions: one is revenue earned from investments or lending, and the other is the cost incurred from borrowing. They would not be adjusted against each other in the same entry as they relate to different transactions and would not directly affect each other's balances.
Learning Objectives
- Attain an understanding of the process and implications involved in adjusting entries during the accounting cycle.
- Distinguish and organize distinct varieties of accounts (assets, liabilities, revenues, expenses) and their influences on financial declarations.