For each separate case, record an adjusting entry (if necessary). Lonzo Company receives $3,000 cash in advance for six months of recycling services on September 1 and records it by debiting Cash and crediting Unearned Revenue for $3,000. Lonzo provides recycling services monthly as promised. Prepare the December 31 year-end adjusting entry that Lonzo records for the work performed from September 1 through December 31. On October 20, Milwaukee Bucks sold a 10 game ticket package for $200 and recorded Unearned Revenue. By December 31, 4 of the 10 games had been played. Record the December 31 year-end adjusting entry that the Bucks record for the 40% of revenue earned on the $200 ticket package. Prepare the December 31 year-end entry that companies record to adjust the Revenue and the Unearned Revenue accounts.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
For each separate case, record an
- Lonzo Company receives $3,000 cash in advance for six months of recycling services on September 1 and records it by debiting Cash and crediting Unearned Revenue for $3,000. Lonzo provides recycling services monthly as promised. Prepare the December 31 year-end adjusting entry that Lonzo records for the work performed from September 1 through December 31.
- On October 20, Milwaukee Bucks sold a 10 game ticket package for $200 and recorded Unearned Revenue. By December 31, 4 of the 10 games had been played. Record the December 31 year-end adjusting entry that the Bucks record for the 40% of revenue earned on the $200 ticket package.
Prepare the December 31 year-end entry that companies record to adjust the Revenue and the Unearned Revenue accounts.
Unearned revenue is the amount which is received from the customers in advance for which goods will be sold in future or service to be provided in future.
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