Accrued Revenue Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset. Adjusting Entries Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence. Rule of Debit and Credit: Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity. Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses. To record: The adjusting entry for the accrued fees.

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Answer 1

Question

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

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During May, Schultz Company produced 12,000 units of a product called Premium. Premium has a standard materials cost of three pieces per unit at $6 per piece. The actual materials used consisted of 35,000 pieces at a cost of $175,000. Actual purchases of the materials amounted to 45,000 pieces at a cost of $225,000. Compute the two materials variances.

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What was the variable overhead rate variance for the month on these general accounting question?

Answer 2

Question

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

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Answer 3

Question

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

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Answer 4

Question

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

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Answer 5

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

Answer 6

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

Answer 7

Chapter 3, Problem 3.10EX

(a)

To determine

Accrued Revenue

Accrued revenue refers to the revenue those are earned but not yet received in a particular accounting period. They are receivable for the business. Business treat accrued revenue as an asset.

Adjusting Entries

Adjusting entries indicates those entries which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued fees.

Answer 8

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

Answer 9

(b)

To determine

Cash basis of accounting

Cash basis of accounting is an accounting method in which all receipts and payments of the business are recorded in that accounting period in which the cash is actually received or paid.

To explain: The necessity of the adjusting entry, if cash basis accounting is followed instead of accrual basis accounting.

Answer 10

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Answer 12

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Answer 13

Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (a) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Does every adjusting entry affect net income for...Ch. 3 - Prob. 9DQ Ch. 3 - (a) Explain the purpose of the two accounts:...

Solution Summary: The author explains the necessity of the adjusting entry for accrued fees in the accounting equation.

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