Describe when an adjusting entry for deferred revenue is needed and what the journal entry will...
Describe when an adjusting entry for deferred revenue is needed and what the journal entry will include
Homework Answers
Answer
- Ad adjusting entry for Deferred revenue is needed WHEN the services for the amount received in advance have been provided (or goods for which advance has been received, have been sold).
- For example, XYZ Inc. received $ 10,000 on 1st Jan
2020 for services to be provided for 5 months, starting from
1st Jan and ending on 31st May 2020.
Here, on 1st Jan 2020, $ 10,000 will be recorded as “Deferred Revenue” under “Unearned Revenue” account. - Now, when 1 month has elapsed and services were performed for
January month, the deferred revenue will need to be adjusted.
Amount of adjustment for January = $ 10000 x 1 month / 5 months = $ 2000 - The adjusting entry for Deferred revenue will include:
a debit to Unearned Revenue account, and
a credit to Service revenue (or Sales revenue) for the amount of deferred revenue that has not being earned. - In our above example, the adjusting entry on 31st
Jan 2020 would be:
[Debit] Unearned Revenue $ 2000
[Credit] Service revenue $ 2000
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Describe when an adjusting entry for deferred revenue is needed
and what the journal entry will...
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Brief Exercise 3-10 Record the adjusting entry for deferred revenue (LO3-3) Suppose a customer rents a vehicle for three months from Commodores Rental on November 1, paying $5,550 ($1,850/month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of the Deferred Revenue and Service Revenue accounts (assuming the balance of Deferred Revenue at the beginning of the year is $0). Journal entry worksheet 1 2 > Record the vehicle rental from...
what is the importance of the following adjusting entries Deferred Expense: Deferred Revenue : Accrued Expense:...
what is the importance of the following adjusting entries Deferred Expense: Deferred Revenue : Accrued Expense: Accrued Revenue: why is it important to complete the adjusting entries?
The following journal entry was recorded as a transaction: • Dr. Deferred Revenue Cr. Consulting Revenues...
The following journal entry was recorded as a transaction: • Dr. Deferred Revenue Cr. Consulting Revenues $20,000 $20,000 Briefly explain what occurred on the day the entry was made --- no concepts are necessary. Short Answer Toolbar navigation В І IC s 를 름 А A Im
The journal entry to record the prior year’s deferred Inflows: property taxes (those expected to be...
The journal entry to record the prior year’s deferred Inflows: property taxes (those expected to be collected more than 60 days beyond year-end) as revenue in the current year would include: Multiple Choice A credit to Revenues Control. A debit to Deferred Inflows: Property Taxes; and a credit to Revenues Control. A debit to Deferred Inflows: Property Taxes. A debit to Revenues Control.
At the end of the month, the adjusting journal entry to record the use of supplies...
At the end of the month, the adjusting journal entry to record the use of supplies would include a debit to: Multiple Choice Supplies and a credit to Service Revenue. Supplies Expense and a credit to Supplies. Supplies and a credit to Cash. Supplies and a credit to Supplies Expense.
General Journal entry options: No Journal Entry Required Accounts Payable Accounts Receivable Ac...
General Journal entry options:
No Journal Entry Required
Accounts Payable
Accounts Receivable
Accumulated Amortization
Accumulated Depreciation
Advertising Expense
Amortization Expense
Bad Debt Expense
Buildings
Cash
Common Stock
Copyrights
Cost of Goods Sold
Deferred Revenue
Delivery Expense
Depreciation Expense
Dividends
Dividends Payable
Donation Revenue
Equipment
Franchise Rights
Goodwill
Income Tax Expense
Income Tax Payable
Insurance Expense
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Legal Expense
Licensing Rights
Logo and Trademarks
Notes Payable (long-term)
Notes Payable (short-term)
Notes Receivable...
What are adjusting entries? Why are they needed? Adjusting entry examples are appreciated.
What are adjusting entries? Why are they needed? Adjusting entry examples are appreciated.
Which of the following does not correctly describe an adjusting journal entry that debits supplies expense and...
Which of the following does not correctly describe an adjusting journal entry that debits supplies expense and credits supplies? The entry decreases net income and decreases stockholders' equity. The entry increases expenses and increases retained earnings. The entry increases expenses and decreases assets. The entry decreases net income and decreases assets.
At December 31, the unadjusted trial balance of H&R Tacks reports Deferred Revenue of $5,300 and...
At December 31, the unadjusted trial balance of H&R Tacks reports Deferred Revenue of $5,300 and Service Revenues of $34,100. Obligations for one-half of the deferred revenue have been fulfilled as of December 31. Required: 1. Prepare the adjusting journal entry on December 31. 2. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance. Complete this question by entering your answers in the tabs below. Required 1 Required 2...
Prepare adjusting journal entries, as needed, for the following items. (If no entry is required for...
Prepare adjusting journal entries, as needed, for the following items. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) a. The Supplies account shows a balance of $560, but a count of supplies reveals only $230 on hand at year-end. b. The company Initially records the payments of all Insurance premlums as prepald Insurance. The unadjusted trial balance at year- end shows a balance of $590 In Prepaid Insurance. A review...
Brief Exercise 3-10 Record the adjusting entry for deferred revenue (LO3-3) Suppose a customer rents a vehicle for three months from Commodores Rental on November 1, paying $5,550 ($1,850/month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of the Deferred Revenue and Service Revenue accounts (assuming the balance of Deferred Revenue at the beginning of the year is $0). Journal entry worksheet 1 2 > Record the vehicle rental from...
The following journal entry was recorded as a transaction: • Dr. Deferred Revenue Cr. Consulting Revenues $20,000 $20,000 Briefly explain what occurred on the day the entry was made --- no concepts are necessary. Short Answer Toolbar navigation В І IC s 를 름 А A Im
General Journal entry options:
No Journal Entry Required
Accounts Payable
Accounts Receivable
Accumulated Amortization
Accumulated Depreciation
Advertising Expense
Amortization Expense
Bad Debt Expense
Buildings
Cash
Common Stock
Copyrights
Cost of Goods Sold
Deferred Revenue
Delivery Expense
Depreciation Expense
Dividends
Dividends Payable
Donation Revenue
Equipment
Franchise Rights
Goodwill
Income Tax Expense
Income Tax Payable
Insurance Expense
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Legal Expense
Licensing Rights
Logo and Trademarks
Notes Payable (long-term)
Notes Payable (short-term)
Notes Receivable...
At December 31, the unadjusted trial balance of H&R Tacks reports Deferred Revenue of $5,300 and Service Revenues of $34,100. Obligations for one-half of the deferred revenue have been fulfilled as of December 31. Required: 1. Prepare the adjusting journal entry on December 31. 2. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance. Complete this question by entering your answers in the tabs below. Required 1 Required 2...
Prepare adjusting journal entries, as needed, for the following items. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) a. The Supplies account shows a balance of $560, but a count of supplies reveals only $230 on hand at year-end. b. The company Initially records the payments of all Insurance premlums as prepald Insurance. The unadjusted trial balance at year- end shows a balance of $590 In Prepaid Insurance. A review...
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