Adjusting Entries

Card Set Information

Author:
Elliott108nl
ID:
238492
Filename:
Adjusting Entries
Updated:
2013-10-03 16:30:27
Tags:
adjustments journal
Folders:

Description:
Journal entries and associated transactions for adjustments.
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  1. To record payment of a prepaid expense:
    • Prepaid rent   X
    •      Cash                X
  2. To record this period's use of a prepaid expense:
    • Insurance Expense    Y
    •     Prepaid Insurance       Y
  3. To record this period's depreciation expense:
    • Depreciation Expense    Z
    •     Accum Depreciation         Z
  4. To record receipt of unearned revenue:
    • Cash     X
    •      Unearned Professional Fees    X
  5. To record this period's earning of prior unearned revenue:
    • Unearned Professional Fees    B
    •     Professional Fees Earned          B

    Take it off of Unearned, and give it to Earned.
  6. To record an accrued expense.
    • Salaries Expense    X
    •      Salaries Payable     X
  7. To record payment of an accrued expense.
    • Salaries Payable     X
    •        Cash                       X
  8. To record an accrued revenue.
    • Accounts Receivable     A
    •        Sales                            A
  9. To record receipt of an accrued revenue.
    • Cash                                X
    •        Accounts Receivable               X
  10. Adjusting entries affect
    one BS account and one IS account, never Cash.
  11. Cash before Work
    • Unearned Revenue
    • Prepaid Expenses
  12. Work before Cash
    • Accrued Revenue
    • Accrued Expenses
  13. Unearned Revenue
    • Cash is received in advance of providing products or services.
    • Revenue Inc, but you owe so Liability Inc.
  14. Prepaid Expenses
    Expenses Inc, so Asset Dec
  15. Accrued Revenue
    Revenue Inc, but not paid yet, so A/R Inc.
  16. Accrued Expenses
    Expenses Inc, but haven't paid yet, so Liability Inc.

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