What Type of Account Is Unearned Revenue?
He makes an adjusting entry where he debits the unearned revenue account $500 and credits the service revenues account $500. Unearned revenue is the revenue a business has received for a product or service that the business has yet to provide to the customer. It is a liability because it reflects money that has been […]
Balance sheet reconciliation: Best practices, examples, and tools to make it easier
If it’s publicly held, this calculation may become more complicated depending on the various types of stock issued. Any amount remaining (or exceeding) is added to (deducted from) retained earnings. Accounts Payables, or AP, is the amount a company owes suppliers for items or services purchased on credit. As the company pays off its AP, […]
The Direct Write off Method: How to Handle Bad Debts in the Books
On to the calculation, since the company uses the percentage of receivables we will take 6% of the $530,000 balance. What effect does this have on the balances in each account and the net amount of accounts receivable? The balance in Accounts Receivable drops to $9,900 and the balance in Allowance for Doubtful Accounts falls […]
What is the journal entry for rent paid in advance?
Therefore, the prepaid expenses are recorded as a debit of cash, and receiving unearned revenue is a credit of cash. In this case the asset (pre paid rent) has been reduced by 1,000 and the income statement has a rent expense of 1,000. The expense in the income statement reduces the net income which reduces […]
How to Record the Issuance of Common & Preferred Stock The Nest
Duratech will pay the market price of thestock at $25 per share times the 800 shares it purchased, for atotal cost of $20,000. The following journal entry is recorded forthe purchase of the treasury stock under the cost method. The company plans to issue most of the shares in exchange forcash, and other shares in […]