Transactions for John Smith Company for the month of October are
presented below. Journalize each transaction. You may omit journal
What is a trial balance and explain its purposes?
A trial balance is a list of accounts and their balances at a given
time. Its primary purpose is to prove the equality of debits and
credits after posting. A trial balance also uncovers errors in
On January 1, 2008, ALTD Company purchased a general liability insurance policy for $3,600
to provide coverage for the calendar year.
1. If the company recorded the policy as an asset when purchased,
Unearned revenue is prepaid revenue.
THE CUSTOMER pays in advance for services that have not yet
been performed by the COMPANY
Is it Asset or Liability?
Unearned revenue is a liability
Examples of Unearned Revenue