Horngren's Financial & Managerial Accounting (5th Edition)

5th Edition

ISBN: 9780133866292

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

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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

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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…

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 repor…

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Textbook Question

Chapter 3, Problem 3.32E

Understanding the alternative treatment of unearned revenues

At the beginning of the year, Dapper Advertising owed customers $2,400 for unearned revenue collected in advance. During the year, Dapper received advance cash receipts of $7,500 and earned $15,000 of service revenue (exclusive of any amount earned from advance payments). At year-end, the liability for unearned revenue is $2,600 and unadjusted service revenue is $ 15,000.

Requirements

1. Record the adjusting entry assuming that Dapper records the cash receipt of unearned revenue by initially crediting a liability account. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance and additional unearned revenue in the Unearned Revenue T-account.
2. Record the adjusting entry assuming that Dapper records the cash receipt of unearned revenue by initially crediting a revenue account. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance in the Unearned Revenue T-account and the additional unearned revenue in the Service Revenue T-account.
3. Compare the ending balances of the T-accounts under both approaches. Are they the same?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 3, Problem 3.31E

Chapter 3, Problem 3.33AP

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Chapter 3 Solutions

Horngren's Financial & Managerial Accounting (5th Edition)

Ch. 3 - Which of the following is true of accrual basis...Ch. 3 - Get Fit Now gains a client who prepays 540 for a...Ch. 3 - The revenue recognition principle requires a. time...Ch. 3 - Adjusting the accounts is the process of a....Ch. 3 - Which of the following is an example of a deferral...Ch. 3 - Assume that the weekly payroll of In the Woods...Ch. 3 - The adjusted trial balance shows a. amounts that...Ch. 3 - A D Window Cleaning performed 450 of services but...Ch. 3 - A worksheet a. is a journal used to record...Ch. 3 - On February 1, Clovis Wilson Law Firm contracted...

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Solution Summary: The author explains the accounting rules for journal entries, which are made at the end of accounting period, to record revenues in the period of which they have been earned, expenses, losses and credit liabilities, capital, revenue and gains.

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Chapter 3 Solutions