142 Assets That A Company Depreciates... Should be shown at cost less accumulated depreciation Assets Cash $ 2,000 Accounts receivable 4,000 Supplies 1,800 Equipment 5,000 Less: Accumulated Depreciation __ 40 4,960 Total assets $12,760 COST Total Depreciation Expensed to Date Book Value
143 Examples Include: Airline Ticket Sales Sports Teams’ Sales of Season Tickets Custom Made Cabinet With Down Payment Required Unearned Revenue (initially recorded as liabilities)
144 Unearned Revenues Received on Oct. 2 $1,200 for advertising services expected to be completed by Dec 31. Unearned Service Revenue Cash 1,200 Oct 2 1,200 Oct 2 Service Revenue GENERAL JOURNAL Debit Credit Oct 2 Cash 1,200 Unearned Service Revenue 1,200 Collected money for work to be performed by Dec 31.
145 Unearned Revenues During October $400 of the revenue was earned. Unearned Service Revenue Cash 1,200 Oct 2 Service Revenue 1,200 Oct 2 GENERAL JOURNAL Debit Credit Oct 31 Unearned Service Revenue 400 Service Revenue 400 To record revenue earned Oct. 31 400 Oct. 31 400
146 GENERAL JOURNAL Date Account Titles and Explanation Debit Credit Jan. 1 Cash 6,000 Unearned Rental Revenue 6,000 Collected $6,000 in advance for rent. Initially, revenues that benefit more than one accounting period are recorded as liabilities . Initially, revenues that benefit more than one accounting period are recorded as liabilities . Unearned Revenue
147 Over time, the revenue is recognized as it is earned . Over time, the revenue is recognized as it is earned . GENERAL JOURNAL Date Account Titles and Explanation Debit Credit Monthly Adjusting Entry for Rent Revenue Jan. 31 Unearned Rental Revenue 500 Rental Revenue 500 Rental revenue for January. Unearned Revenue
148 Rental Revenue 1/31 500 Unearned Rental Revenue 1/31 500 1/1 6,000 Bal. 5,500 Income Statement Revenue earned this period. Income Statement Revenue earned this period. Balance Sheet Liability for future periods. Balance Sheet Liability for future periods. Converting Liabilities to Revenue
149 Accruals • Revenue has been earned, but not collected. • Expenses have been incurred, but not yet paid.
150 Accrued Revenues Revenues earned but not yet received in cash or recorded at the statement date.
151 Examples Include: Interest Earned on Savings Account Work Completed But Not Yet Billed to Customer Accruing Uncollected Revenue
Accrued Revenues Earned $200 for advertising services to clients in October, but they were not billed until after October 31st. GENERAL JOURNAL Debit Credit Oct 31 Accounts Receivable 200 Service Revenue 200 Accounts Receivable 200 Oct 31 Service Revenue 200 Oct 31
153 Accrued Expenses Expenses incurred but not yet paid or recorded at the statement date.
154 Examples Include: Interest on a loan Wages and Salaries Property Taxes Hey, when do we get paid? Accruing Unpaid Expenses
Interest Expense Interest Payable Oct 31 50 Oct 31 50 GENERAL JOURNAL Debit Credit Oct 31 Interest Expense 50 Interest Payable 50 Accrue interest expense for the month Accrued Interest
Accrued Salaries - Salaries Paid for after the Service Has Been Performed.
Salaries Expense Salaries Payable Oct 31 1,200 Oct 31 1,200 GENERAL JOURNAL Debit Credit Oct 31 Salaries Expense 1,200 Salaries Payable 1,200 Accrue salary expense for the month Accrued Salaries
You've reached the end of your free preview.
Want to read all 319 pages?