Unearned Revenue Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business. 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 unearned fees.

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Answer 1

Question

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

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Answer 2

Question

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

Expert Solution & Answer

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Answer 3

Question

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

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Answer 4

Question

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

Answer 6

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

Answer 7

Chapter 3, Problem 3.8EX

To determine

Unearned Revenue

Unearned revenue is the revenue which is earned in advance, ahead of providing goods and services. As per the revenue recognition principle it is not recorded in the books of accounts. This is a liability for the business.

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 unearned fees.

Answer 8

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Answer 9

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Answer 10

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Answer 11

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 that unearned revenue is not recorded in the books of accounts and is a liability for the business.

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