1. Which types of adjusting entries are natural opposites?

a. Net income and net loss

b. Expenses and revenues

c. Prepaids and accruals

d. Prepaids and depreciation

2. Assume you prepay Get Fit Now for a package of six physical training sessions. Which type of account should you have in your records?

a. Accrued revenue

b. Accrued expense

c. Prepaid expense

d. Unearned revenue

3. Unearned revenue is always

a. stockholders’ equity because you collected the cash in advance.

b. revenue.

c. a liability.

d. an asset.