Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense:

Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense:

a. Cash received for services not yet rendered. 

b. Insurance paid for the next year.

c. Interest revenue earned but not received.

d. Salaries owed but not yet paid.

Answer:

a. (2) Unearned revenue

b. (1) Prepaid expense

c. (3) Accrued revenue

d. (4) Accrued expense