Professional Documents
Culture Documents
VALUATION
Allowance
Bad Debts Accounts Receivable xx Bad Debts
for Bad Debts
X % xx
% of Accounts ABD, end xx
Receivable Less: ABD, beg xx
Bad Debts Expense xx
Receivable Income
Revenue Revenues earned but not yet received. (Receivables)
(e.g. Interest Receivable) (e.g. Interest Income)
ACCRUALS
Expense Payable
Expense Expense already incurred but not yet paid. (Payable)
(e.g. Salaries Expense) (e.g. Salaries Payable)
Prepaid Asset
Original Entry Cash
(e.g. Prepaid Rent)
ASSET
Paid for in advance of its method
use. At the time of Adjusting Expense Prepaid Asset
Entry (e.g. Rent Expense) (e.g. Prepaid Rent)
payment, an asset is
Prepayment
MIXED acquired that will expire or Expense
ACCOUNTS be used up and it becomes Original Entry Cash
(e.g. Rent Expense)
EXPENSE
an expense. Method
Adjusting Prepaid Asset Expense
Entry (e.g. Prepaid Rent) (e.g. Rent Expense)
Deferrals
Items representing some LIABILITY
Original Entry
Cash Unearned Revenue
method (e.g. Unearned Rent)
SIMPLIFIED DISCUSSION ON ADJUSTING ENTRIES
cash or property Adjusting Unearned Revenue Income
Entry (e.g. Unearned Rent) (e.g. Rent Income)
received, the earnings or
realization of which Income
Original Entry Cash
covers a period INCOME (e.g. Rent Income)
extending the current or Method Adjusting Income Unearned Revenue
Entry (e.g. Rent Income) (e.g. Unearned Rent)
present period.
AD= 3, 6, 9, 12, 15
1. On hand is a 45-day, 21% note receivable dated December 16 for P36,000. No interest had been collected on this.
36,000 x .21= 7, 560 x 15/365 = 310.68
Interest Receivable 310.68
Interest Income 310.68
2. Salaries of employees of P12,000 due for the last week of December 2019 will be due for payment on January 3 2020.
Salaries Expense 12,000
Salaries Payable 12,000