COMMERCE 1AA3 Lecture Notes - Lecture 8: Accounts Receivable, Historical Cost
19 Feb 2016
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Salaries owed (or any other type of expense) that is owed (or accrued) are an example of accruals which would require the following adjusting entry: Revenues accrued are revenues earned but not recorded yet, which would require the following adjusting entry: When unearned revenue is earned, the adjusting entry would be: A company using the cash basis of accounting pays for one year of rent in advance. The entry to record this transaction will involve a debit to: Rent expense (usually it would be prepaid rent but because it is a cash basis question it is rent expense) The cost of something as an expense would be recorded when that product or service is used up. Question on quiz #2: (study ch 2 slides about revenue recognition)
