ACC 305 Lecture Notes - Lecture 17: Accrual, Accounts Receivable, Historical Cost
Document Summary
Accruals are transactions, events, or arrangements in which the cash flows occur after the related expenses are incurred or revenues earned. An accrued expense is an expense that has been incurred but has not yet been paid. Jaymie corporation pays employees" salaries every six months, making the last. At the end of december, its employees have earned salaries for three months but have not been paid. (,800 3/6) An accrued revenue is a revenue that a company has earned but not yet received. On september 1, jaymie corporation accepted a ,320, 15% note as payment when it sold an acre of land. Jaymie corporation is owed interest from september 1 through december 31: (,320 15% 4/12) Certain types of adjusting entries are based on accounting amounts that are not known with certainty and must be estimated at the end of each period. Allowance for uncollectible accounts and bad debt expense.
