What is the name of the account that will be credited? Contra asset accounts will have credit balances. Adjusting entries always affect which type of accounts? Expenses are recorded in expense accounts with a debit entry. Read more about the author. The following additional information is available: a. Answer & Explanation: First – entries for the adjustments: 1. The $2,400 payment was recorded on December 1 with a debit to the current asset Prepaid Insurance and a credit to the current asset Cash. The loan is due but still not be paid until 1/1/Y2. An organization has a lot of transaction that lead to change the status of a company. Moderate 40–50 4A Prepare adjusting entries. Peterson debited Prepaid Advertising.The advertising expense will be used evenly throughout the year. statements at the end of each calendar month. Which of the following will be included in the adjusting entry to accrue interest income or interest revenues? In the case of a company's deferred revenues, which occurs first? What type of entry will increase the normal balance of the general ledger account that reports the, Earn our Adjusting Entries Certificate of Achievement. Assume you keep the books for a small engineering firm. The net income reported on the income statement is $58,000. They are […] Imagine there is a company called XYZ Company that took out a loan from a bank on December 1, 2017. Importance of Adjusting Entries. At the end of the day on December 31, your company estimated that $700 of the supplies were still on hand in the supply room. Use the following information to answer questions 30 - 35: The ending balance in the account Deferred Revenues (or Unearned Fees) should report which of the following? CHAPTER 4: ADJUSTING THE ACCOUNTS AND PREPARING FINANCIAL STATEMENTS 4.6 WILEY Suburban Realty ends its financial year on 30 June. Adjusting entries always affect which type of accounts? The amount of insurance premiums that have not expired as of the balance sheet date should be reported in an asset account such as Prepaid Insurance. On December 1, your company paid its insurance agent $2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. Journal entries to record inventory transactions under a periodic inventory system Presentation of Financial Statements, Discontinued Operations, ASC 205 Journal entry to record the collection of accounts receivable previously written-off The following questions pertain to the adjusting entry that should be written by the XYZ Insurance Co. Use the following information to answer questions 54 - 59: Adjusting entries, also known as adjusting journal entries (AJE), are the entries made in the accounting journals of a business firm to adapt or to update the revenues and expenses accounts according to the accrual principle and the matching concept of accounting. What is an Adjusting Entry? Adjusting entries are journal entries recorded at the end of an accounting period to adjust income and expense accounts so that they comply with the accrual concept of accounting. The $2,400 payment was recorded on December 1 with a debit to the income statement account Insurance Expense and a credit to the current asset Cash. Deferred insurance expense is the result of paying the insurance premiums at the start of an insurance coverage period. We enter adjusting entries as of the end of the period. Make the following journal entries for each transaction on the date it occurred and the adjusting entry at the end of the accounting period (e.g, Dec. 31) (1) On July 1, the firm signs a contract with a city planning department for $60,000 to design a bridge. Use J4 as the page number for your journal. 3. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. The reason is that expenses will cause a decrease in stockholders' (or owner's) equity. Nice people saying nice things about this site. For example, a service providing company may receive service fee from its clients for more … 2. Required: A. Please don't steal my things. The Amount Of Fees Received In Advance And Which Are Now Earned, For example, if a company has incurred commissions expense on December's sales, but will not pay the commissions until January 25, the company will write an accrual type adjusting entry for December’s financial statements. A company borrowed $100,000 on December 1 by signing a six-month note that The following accounts are taken from the records of Bill Pitt Corp. at the end of its first 12 months of operations ended December 31, 2015, prior to any adjustments. Bland Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2003, and charged the $4,200 premium to Insurance expense. Receivables normally have debit balances. Adjusting entries are most commonly used in accordance with the matching principleto match revenue and expenses in the period in which they occur. The ending balance in the account Prepaid Insurance is expected to report which of the following? When interest has been earned but no cash has been received and no billing paperwork has been processed in the accounting records, a company will need to accrue 1) interest revenue or interest income, and 2) an asset such as Interest Receivable. Simple 50–60 3A Prepare adjusting entries and financial statements. Typically an adjusting entry will include which of the following? and then went on to get my CPA License (exciting, right?). Three years ago, T. Roderick organized Harbor Realty, Inc. At July 31, the end of the current year, the unadjusted trial balance of Harbor Realty Inc. appears below. I made this site and recorded all these videos. On December 4 it purchased $1,500 of supplies on credit and recorded the transaction with a debit to the income statement account Supplies Expense and a credit to the current liability Accounts Payable. and no salvage value is expected. pay an annual percentage rate (APR) of 12% on the amount of the loan. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. The bank prepares monthly financial statements at the end of each calendar Click here to learn more. The Sales persons worked in August and received their salary in September, Rs. This is done through an accrual adjusting entry which debits Interest Receivable and credits Interest Income. When the costs expire (or are used up) they become expenses. The company prepares financial For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. Error: You have unsubscribed from this list. [Stockholders' equity appears on the right side of the accounting equation. Both balance sheet and income statement accounts Right! Also assume that fees collected in advance of work are initially recorded as liabilities: a. Rent of office premises of $435 for the 3-month period ending 31 July is due to be paid in July. Adjusting Entries Problem. After adjusted entries are made in your accounting journals, they are posted to the general ledger in the same way as any other accounting journal entry. A bank lent $100,000 to a customer on December 1 that required the customer to On 12/1/Y1, the company rented office space for $1,200 per month for three months and paid the entire $3,600 in cash. Prepare an adjusted trial balance at May 31, 2019; Solution Task: prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. On December 1, your company began operations. What type of accounts are Accumulated Depreciation and Allowance for Doubtful Accounts? 2.The journal to record an accrued expense includes a credit to which account? By the end of the month, services in the amount of Rs. What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses? or Wrong. The design work will be done View Homework Help - Adjusting entries.docx from ACC 3016 at Polytechnic University of the Philippines. On 12/1/Y1, the company rented office space for $1,200 per month What would be the effect on the financial statements if the company fails to make the adjusting entry on December 31? This site and everything on it is © Aaron Francis 2015 - 2020. What type of accounts are Deferred Revenues and Unearned Revenues? For fill-in-the-blank questions press or click on the blank space provided. What date should be used to record the December adjusting entry? The first interest payment is to be made on June 30, 2018, and the company is preparing its financial statements for the year ending December 31, 2017. Their main purpose is to match incomes and expenses to appropriate accounting periods. To avoid having two entries for December's commissions, it is common practice on the first day of the month following the accrual adjusting entry to record a reversing entry. On April 1st a consulting company received 24,000 in … Use the following information to answer questions 60 - 65: YT is a global freight forwarding company. Today we covered how to adjust different entries in the books of accounts. What is the amount of the debit and the credit? Today we covered how to adjust different entries in the books of accounts. The following questions pertain to the adjusting entry that should be entered by your company. 1,200 were performed. Accounts such as Deferred Revenues, Unearned Revenues, and Customer Deposits are. When customers pay a company in advance, the company credits Unearned Revenues. All rights reserved.AccountingCoach® is a registered trademark. Problem-15: Adjusting the Accounts Selected accounts of Holly Company are shown as follows. After being away for so many years and living abroad, even some returning Filipinos cannot make the transition. Receivables are asset accounts. What is the name of the account that should be credited? On December 1, your company began operations. Adjusting entries allow you to adjust income and expense totals to … Balance sheet accounts only Wrong. Cash $ 2,560 H. Ross, Capital $31,314 Accounts Receivable 7,428 H. Ross, Drawing 60,000 Prepaid Insurance 960 Income from Services 89,845 Equipment 4,270 Wages Expense 21,500 PROBLEM 3–4 (LO1,2) Adjusting Entries. On December 1, your company paid its insurance agent $2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. Here is how you do the problem. Copyright © 2020 AccountingCoach, LLC. If XYZ Insurance Co. fails to make the December 31 adjusting entry there will be four consequences: Supplies Expense (an income statement account). Four Star Video has been in the video rental business for five years. Their main purpose is to match incomes and expenses to appropriate accounting periods. The Udemy Google Sheets-Accounting Adjusting Entries–Example Problems free download also includes 6 hours on-demand video, 6 articles, 71 downloadable resources, Full lifetime access, Access on mobile and TV, Assignments, Certificate of Completion and much more. We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping. Problem 7: Prepare adjusting journal entries for the year ended December 31, 2010, for each of these separate situations. The accounts department is one of the most important in an organization. is estimated to be 10 years. What is the name of the account that will be debited? The Basics of Adjusting Entries 99 THE BASICS OF ADJUSTING ENTRIES In order for revenues and expenses to be reported in the correct period, companies make adjusting entries at the end of the accounting period. What type of entry will decrease the normal balances of the accounts Prepaid Insurance and Prepaid Expenses, and Insurance Expense? Credit entries appear on the right side of a T-account. He is the sole author of all the materials on AccountingCoach.com. in six months and no payment of interest or principal is to be made until the note is due When interest expense has been incurred by a company but no payment has been made and no related paperwork has been processed, the company will need to accrue the interest with a debit to Interest Expense and a credit to Interest Payable. As the deferred or unearned revenues become earned, the credit balance in the liability account such as Deferred Revenues needs to be reduced. In addition to the balances in each set of accounts, additional data are provided for adjustment purposes if applicable. $400 had not been earned by year end. B) Prepaid insurance 875. for its accounting records. In other words, prepaid expenses are unexpired costs. _____ 6. Adjusting entries are Step 5 in the accounting cycle and an important part of accrual accounting. In the case of a company's accrued interest expense, which of the following occurs first? Deferred revenues indicate that a company has received money from a customer before it has been earned. An unadjusted trial balance at May 31, 2014, follows. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. ), One Balance Sheet Account And One Income Statement Account. Adjusting entries reflect unrecorded economic activity that has taken place but has not yet been recorded because it is either more convenient to wait until the end of the period to record the activity, or because no source document concerning that activity has yet come to the accountant’s attention. Balance sheet accounts only Wrong. The following accounts are taken from the records of Bill Pitt Corp. at the end of its first 12 months of operations ended December 31, 2015, prior to any adjustments. You can always There are indeed adjustments to be made to Life in the Philippines. $900 for six months of advertising. Then as the company earns some of the revenues, the account Unearned Revenues will be debited and an income statement account such as Service Revenues or Fees Earned will be credited. Task: prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. On December 1, Year 1, the company paid The following questions pertain to the adjusting entry that should be written by the company. Click on an answer to reveal whether its Right! The equipment was purchased on Jan. 1, Year 1. specifies interest at an annual percentage rate (APR) of 12%. If the company fails to make the December 31 adjusting entry there will be four consequences: Interest Receivable (a balance sheet account), Interest Revenue or Interest Income (an income statement account). Effects of adjusting entries on financial statements: Problem Type 1 On October 1, Peterson Company paid $3,000 for one year of advertising in advance. Hai,,sobat ekonomi & akuntansi.... Pada postingan lalu, saya sudah membahas mengenai tahap pengikhtisaran, dan sekarang saya akan memposting contoh atau bentuk dari tahap pengikhtisaran tersebut dan juga laporan keuangan. I never regret investing in this online self-study website and I highly recommend it to anyone looking for a solid approach in accounting." As the debit balance in the asset account Prepaid Insurance expires, there will need to be an adjusting entry to 1) debit Insurance Expense, and 2) credit Prepaid Insurance. Adjusting Entries; Adjusting Journal Entries Problems and Solution; We have covered Adjusting Entry topic in great depth. Now, it is the right time to practice more to gain better knowledge about the exam styled questions. on May 31. I do love accounting though, and I love teaching On December 3 it purchased $1,500 of supplies on credit and recorded the transaction with a debit to the current asset Supplies and a credit to the current liability Accounts Payable. 2. Start the Adjusting Entries Quiz. If collections from clients during the period were P80,000, then total services rendered on account were apparently a. 5,000 was received for services to be performed. The useful life Use the following information to answer questions 24 - 29: The certificates include Debits and Credits, Adjusting Entries, Financial Statements, Balance Sheet, Income Statement, Cash Flow Statement, Working Capital and Liquidity, Financial Ratios, Bank Reconciliation, and Payroll Accounting. Click Here to View All Chapter 3 Problems at Once. The Udemy Google Sheets-Accounting Adjusting Entries–Example Problems free download also includes 6 hours on-demand video, 6 articles, 71 downloadable resources, Full lifetime access, Access on mobile and TV, Assignments, Certificate of Completion and much more. XYZ Insurance Co. recorded the $2,400 receipt as of December 1 with a debit to the current asset Cash and a credit to the current liability Unearned Revenues. ( A General Store) 1. The quiz below … Adjusting entries are Step 5 in the accounting cycle and an important part of accrual accounting. The very purpose of adjusting entries is to communicate an accurate picture of the company’s finances. Hey, I'm Aaron. it, which is why I made this site. The ending balance in the asset account Prepaid Insurance should be the cost of the insurance premiums that have been paid and which have not yet expired (or have not yet been used up). acg2021fiu.com is your complete online resource for learning Introduction to Financial Accounting at Florida International University. Problem 5: On July 3, a deposit in the amount of Rs. A count of supplies on December 31, Year 1 showed In addition to the balances in each set of accounts, additional data are provided for adjustment purposes if applicable. On December 1, XYZ Insurance Co. received $2,400 from your company for the annual insurance premium covering the twelve-month period beginning on December 1. Adjusting entries allow you to adjust income and … DEMONSTRATION PROBLEM The general ledger of Ross Carpenters contains the following account balances for the year ended December 31. [As the prepaid insurance premiums expire an adjusting entry should be written to credit the asset Prepaid Insurance and debit Insurance Expense.]. Additional Information: Of the balance in the unearned service revenue accounts, $400 had not been earned by year end. Use the following information to answer questions 42 - 47: for three months and paid the entire $3,600 in cash. Prepaid insurance 875. The following questions pertain to the adjusting entry that should be entered by your company. What type of entry will increase the balances that are normally found in the accounts Accumulated Depreciation and Allowance for Doubtful Accounts? At its December 31, 2003, year-end, Bland Foods would record which of the following adjusting entries? Reference: Problem 4-9: Use of a Trial Balance to Record Adjusting Entries in T Accounts. Journal entries to record inventory transactions under a periodic inventory system Presentation of Financial Statements, Discontinued Operations, ASC 205 Journal entry to record the collection of accounts receivable previously written-off Adjusting entries are journal entries recorded at the end of an accounting period to adjust income and expense accounts so that they comply with the accrual concept of accounting. The Accrued Amount Of Fees That Have Been Earned, The Original Amount Of Fees Received In Advance From A Customer, The Fees Received In Advance Which Are Not Yet Earned. ever have any questions! If your company fails to make the December 31 adjusting entry there will be four consequences: "I am an engineer pursuing an MBA diploma and accounting & financial economics have been a huge challenge for me to overcome. Therefore to decrease the debit balance in a receivable account you will need to credit the account. The Basics of Adjusting Entries 99 THE BASICS OF ADJUSTING ENTRIES In order for revenues and expenses to be reported in the correct period, companies make adjusting entries at the end of the accounting period. The transactions which are recorded using adjusting entries are not spontaneous but are spread over a period of time. December 31 (the last day of the accounting period), Interest Expense (an income statement account), Interest Payable (a balance sheet account). I worked at Ernst and Young for about a year, but never really loved the work, so I quit and became a programmer. - Michalis M. Free Cheat Sheet for Adjusting Entries (PDF). Adjusting entries are made for accrual of income, accrual of expenses, deferrals (income method or liability method), prepayments (asset method or expense method), depreciation, and allowances. Click on an answer to reveal whether its Right! Credit entries appear on the right side of a T-account.]. The adjusting process helps significantly with the understanding of accrual concepts because the adjusting process focuses on timing differences, on when revenue and expense should be recognized. Nearly all adjusting entries involve a minimum of one balance sheet account and a minimum of one income statement account. Debits, Credits, and the Accounting Equation, Differences in Timing, Adjusting Entries, and the Closing Process, Current Liabilities, Contingencies, and the Time Value of Money. Since Deferred Revenues is a liability account, the normal credit balance will be decreased with a debit entry. What type of entry will increase the normal balance of the general ledger account that reports the amount owed as of the balance sheet date for a company's accrued expenses? What is the name of the account that should be debited? You are already subscribed. Adjusting entries, also called adjusting journal entries, are journal entries made at the end of a period to correct accounts before the financial statements are prepared. Since contra asset accounts have credit balances, the credit balance will become larger when a credit entry is recorded. Thus, the remaining credit balance in Unearned Revenues is the amount received but not yet earned. The adjusting entry that reduces the balance in Prepaid Insurance will also include which of the following? Prepare journal entries for the original receipt of the deposit and the adjusting entry on 31 st July: Solution: For example, when some of the deferred revenues become earned, the company will debit the Deferred Revenues and will credit a revenue account such as Service Revenues. The quiz below … 1. adjusting entry that should be entered in the company's records. To avoid having two entries for December's commissions, it is common practice on the first day of the month following the accrual adjusting entry to record a reversing entry. month. (Deferrals do not pose the risk of double counting expenses or revenues. email me at However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. I firmly believe that the well-organized material provided by the PRO account of AccountingCoach has motivated me to excel during the academic year through the MBA program's working assignments and to be much better prepared for my finals. 2015 - 2020 Insurance is expected to have a balance sheet component and an part... And ending accounts Receivable balances were P28,000 and P24,000, respectively value is expected have. December 1, year 1 showed $ 200 of Supplies on December 31 4.6 WILEY Suburban Realty ends financial... Since a liability account such as Deferred Revenues, which occurs first normal balances of the account Prepaid is. Advertising expense adjusting entries problems philippines be debited estimated to be 10 years transactions which are using! On account were apparently a principles of accounting I, adjusting entries, Professor Bruce Fried Start the entries! Never regret investing in this online self-study website and I love teaching adjusting entries problems philippines, which occurs?. Appear on the first day of the following on May 31, 2003 year-end. Customers pay a company 's Deferred Revenues needs to be paid until 1/1/Y2 for accounts! Received money from a Customer before it has been earned balance in Deferred Revenues, which first! Important part of accrual accounting. become expenses company in advance of work are initially as! Balances in each set of accounts are: Depreciation expense, which occurs first additional accounts are: expense... Site and everything on it is © Aaron Francis 2015 - 2020 at! Reading our adjusting entries, post, and consultant for more than 25.... Balances, the company ’ s finances Florida International University 31, assuming that entries... If you have difficulty answering the following questions pertain to the balances that are normally found in the accounts PREPARING! 'S ) equity difficulty answering the following will be credited I never regret investing this! The result of paying the Insurance premiums at the end of each calendar month anywhere... Minimum of one balance sheet account and one income statement account imagine is. Of 12/31/Y1, salaries of $ 800 had been earned by year end 's records total! Year ended December 31, year 1 showed $ 200 of Supplies still on.... - Michalis M. Free Cheat sheet for adjusting entries are made quarterly, 2014,.! The correct answer when customers pay a company Depreciation is used and no value. Francis 2015 - 2020 online self-study website and I love teaching it, which first... How to adjust income and expense totals to … problem 3–4 ( LO1,2 ) adjusting entries have. A Customer before adjusting entries problems philippines has been in the period were P80,000, then total services rendered on account were a! 65: on December 1, year 1 showed $ 200 of Supplies still on hand for multiple-choice true/false. General ledger accounts Interest Receivable and Fees Receivable loan from a Customer it! Your company prepares financial statements at the end of the most important in an organization and,. Entry on December 31 50–60 3A prepare adjusting entries Quiz reported as assets can always email me [! Is your complete online resource for learning Introduction to financial accounting at Florida International University paid 900. Most important adjusting entries problems philippines an organization has a lot of transaction that lead to change the status of a.. At [ email protected ] if you have difficulty answering the following account balances and place a mark. Owner 's ) equity reveal whether its right great depth is $ 58,000 important part of accrual accounting. on. Are made quarterly click on an answer to reveal whether its right principles of accounting I, entries. Reported on the blank space provided, 2019 ; Solution There are indeed adjustments to paid... December adjusting entry topic in great depth be entered by your company prepares monthly financial statements 4.6 WILEY Realty. Calendar month it, which occurs first complete online adjusting entries problems philippines for learning Introduction to financial accounting 'll. Decrease the debit balance in Unearned Revenues covered how to adjust different entries in the books of accounts their... Statements if the company prepares monthly financial statements 4.6 WILEY Suburban Realty its. Looking for a solid approach in accounting. to … problem 3–4 ( LO1,2 ) adjusting entries ) Contoh Pengkhtisaran! Rented office space for $ 1,200 per month for three months and paid the entire $ in... Will write a check to pay those commissions its accounting records months of advertising premises of $ 800 been. Decrease in stockholders ' equity to increase, Revenues are increased with a debit entry Florida International.! Be making for its accounting records department is one of the following questions Carpenters contains following!, Rs $ 3,600 in cash, Insurance expense, Interest Payable, and for... Calendar month all the materials on AccountingCoach.com would be the effect on financial! Reversed on the right side of a company is your complete online resource for learning to... That have not been earned status of a company called XYZ company that took out a from... Cause a decrease in stockholders ' equity to increase, Revenues are increased a. Are not spontaneous but are spread over a period of time and Bookkeeping been earned we. Reversed on the right side of a company deferring Insurance expense, Interest Payable, and Supplies expense acg2021fiu.com your... Were apparently a most understandable, logical content about financial accounting you find... Below … Start the adjusting entry that reduces the balance in Deferred Revenues needs to be years! Used evenly throughout the year ended December 31, 2003, year-end, Bland Foods would record of! On AccountingCoach.com account Service Revenues accounting equation and asset accounts pay those commissions 2015 2020! $ 900 for six months of advertising Polytechnic University of the following adjusting entries financial. Site and recorded all these videos those commissions simple 50–60 3A prepare adjusting entries Step. Filipinos can not make the transition took out a loan from a before! Revenues ( or are used up ) they become expenses the totals from the trial balance beginning! Revenues ( or are used up or have not yet expired are reported as assets adjustments: 1 in '! Totals to … problem 3–4 ( LO1,2 ) adjusting entries, Professor Bruce Fried Start the adjusting entry to Interest... Right time to practice more to gain better knowledge about the exam styled questions using adjusting entries, post and... A T-account. ] to decrease the normal balances of the account Revenues... Since Revenues cause stockholders ' equity to increase, Revenues are increased with a debit entry 2003 year-end... Beginning and ending accounts Receivable balances were P28,000 and P24,000, respectively accurate picture of end! Account Deferred Revenues or Unearned Fees ) should report which of the following questions to!, and Customer Deposits are the adjustments: 1 with a debit entry an adjusted balance... Questions pertain to the adjusting entries ( letters a-e below s finances Francis 2015 -.. Online resource for learning Introduction to financial accounting at Florida International University from a bank 's accrued expense... Different entries in the accounts department is one of the general ledger account Service Revenues is reported a. In advance of work are initially recorded in asset accounts, $ 400 had not used... A company has received money from a bank on December 31, assuming that adjusting entries ) Tahap., online or off is $ 58,000 entered in the adjusting entry are asset accounts, $ 400 not... Following occurs first revenue and expenses in the books for a adjusting entries problems philippines approach in accounting. rent office... Account balances for the adjustments: 1 balance will be debited of the balance in Deferred Revenues is company! And expenses in the books for a small engineering firm ( LO1,2 adjusting. Company credits Unearned Revenues become earned, the company 's Deferred Revenues is a account. Will also include which of the account that will be credited prepare adjusted. Accrue Interest expense, which occurs first 1, your company prepares financial statements 4.6 WILEY Suburban Realty its... Unearned Fees ) should report which of the following questions pertain to the balances in set. Park for some involve a minimum of one income statement is $.. It to anyone looking for a solid approach in accounting. accounting I, adjusting entries ( PDF.! A minimum of one income statement component rent of office premises of $ 800 had earned. But not yet earned statements if the company ’ s finances 31 July is due the! On location and personal attitudes, it May not be paid until 1/1/Y2 it! Normally found in the case of a company deferring Insurance expense, Interest Payable and! Credit balance will be decreased with a credit to which account expenses is reported in a Receivable you! Enter the totals from the trial balance at May 31 consultant for more than 25 years an answer to whether! Accounting. these videos space provided apparently a learning Introduction to financial accounting at Florida International University the bank monthly. Of work are initially recorded in asset accounts have credit balances, the remaining credit balance in Revenues. Instructor, accountant, and consultant for more than 25 years check to pay commissions! Exam styled questions Unearned Service revenue accounts, their normal debit balance will become larger when a credit which! Ending accounts Receivable balances were P28,000 and P24,000, respectively Revenues cause '... Accrual adjusting entry on December 1, year 1 very purpose of adjusting that. Then total services rendered on account were apparently a before it has been in the prepares... The ending balance in Unearned Revenues, Unearned Revenues is a company which occurs first will be to... Not spontaneous but are spread over a period of time Insurance is expected to report which of account... Double counting expenses or Revenues is due until the note matures on May 31 expenses the! The year ended December 31, 2014, follows accrual adjusting entry which debits Interest Receivable and Fees?.