-
To record payment of a prepaid expense:
-
To record this period's use of a prepaid expense:
- Insurance Expense Y
- Prepaid Insurance Y
-
To record this period's depreciation expense:
- Depreciation Expense Z
- Accum Depreciation Z
-
To record receipt of unearned revenue:
- Cash X
- Unearned Professional Fees X
-
To record this period's earning of prior unearned revenue:
- Unearned Professional Fees B
- Professional Fees Earned B
Take it off of Unearned, and give it to Earned.
-
To record an accrued expense.
- Salaries Expense X
- Salaries Payable X
-
To record payment of an accrued expense.
- Salaries Payable X
- Cash X
-
To record an accrued revenue.
- Accounts Receivable A
- Sales A
-
To record receipt of an accrued revenue.
- Cash X
- Accounts Receivable X
-
Adjusting entries affect
one BS account and one IS account, never Cash.
-
Cash before Work
- Unearned Revenue
- Prepaid Expenses
-
Work before Cash
- Accrued Revenue
- Accrued Expenses
-
Unearned Revenue
- Cash is received in advance of providing products or services.
- Revenue Inc, but you owe so Liability Inc.
-
Prepaid Expenses
Expenses Inc, so Asset Dec
-
Accrued Revenue
Revenue Inc, but not paid yet, so A/R Inc.
-
Accrued Expenses
Expenses Inc, but haven't paid yet, so Liability Inc.
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