Accounting for Beginners #14 / Journal Entry with Cash / Expense
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Tally-GST Advance Receipt Adjustment Entries for Same Month Next Month and Cancellation Part-15
Learn GST Advance Receipt Adjustment Entries for Same Month Adjustment, Next Month Adjustment and Accounting Entries for GST after Advance Receipt ...
At the end of the period, unearned revenues must be checked and adjusted if necessary. The adjusting entry for unearned revenue depends upon the journal entry made when it was initially recorded. There are two ways of recording unearned revenue: (1) the liability method, and (2) the income method.
As the amount received in advance is earned, the current liability account will be debited for the amount earned and the Revenues account reported on the income statement will be credited. This is done through an adjusting entry .
Revenue Received in Advance Journal Entry Explained Debit. Cash has been received by the business and deposited into its bank account. The debit records the increase in the cash balance in the balance sheet of the business. Credit
When on July 1 Paul’s Computing entered into a 6-month network service contract for $2400 and received an $800 advance payment the following journal entry was made: DR Cash $800 CR Unearned Revenue $800. At the end of July 1 month of revenue from that contract was earned.
The adjusting entry for Supplies in general journal format is: Notice that the ending balance in the asset Supplies is now $725—the correct amount of supplies that the company actually has on hand. The income statement account Supplies Expense has been increased by the $375 adjusting entry.