0
Does the revenue accounts come before the expense accounts in the general ledger?
Wiki User
∙ 7y agoWant this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What are the differences between dividend and expense accounts?
Dividend account is the account used to record money paid on stock such as common stock, this comes out of retained earnings. Expense accounts are expenses that the company has to maintain operation and come out of Revenue, before dividends are calculated. A company may choose to not pay dividends on stock for a year (or so) if the company's retained earnings do not meat a certain amount.
Why is unearned revenue a liability instead of a revenue account?
Unearned revenue accounts represent the amount of cash received before services are provided. Since services have not been provided yet, it is not revenue. (It represents the obligation for future services in order for the revenue to be earned.)
When Adjusting entries are required?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
Adjusting entries are required when because?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
Is there a difference between adjusting entries and correcting entries?
Adjusting entries occur completed at the end of the accounting period, but before preparing the financial statements; so in order for a company's accounting financial statements and records to be up-to-date on the accrual basis of accounting. To show an example, each day the company earns wages expense but the payroll relating to workers' wages for the last days of the month would not be entered in the accounting records until after the end of the accounting period. Also, we know that this company uses electricity each day but receives just one bill per month, perhaps on the 20th day of the month. The electricity expense for the last 10-15 days of the month must be put into the accounting records if the financial statements are going to show all of the expenses and the amounts owed for the up-to-date accounting period. There are more additional acclimating entries amounts that the company paid prior to amounts becoming expenses. For examples, the company perhaps paid its insurance premiums for a four month period prior to the start of the four month period. It is possible the company may have deferred the expense by recording the amount in the asset account Prepaid Insurance. During the accounting period some of those premiums expired (were used up) and need to appear as expense in the current accounting period and the asset balance reduced. With closing entries they are dated as of the last day of the accounting period. However they are entered into the accounts after the financial statements have been prepared. Manly closing entries contain the income statement accounts. The closing entries will set the balances of all of the revenue accounts and the expense accounts to zero. This means that the revenue and expense accounts will start the new year with zero in the accounts, thus allowing the company to easily report the new year revenues and expenses. So we see that the net amount of all of the balances from expense and revenue accounts at the end of the year will be in retained earnings (for corporations) or owner's equity (for sole proprietorships).
What are the differences between dividend and expense accounts?
Dividend account is the account used to record money paid on stock such as common stock, this comes out of retained earnings. Expense accounts are expenses that the company has to maintain operation and come out of Revenue, before dividends are calculated. A company may choose to not pay dividends on stock for a year (or so) if the company's retained earnings do not meat a certain amount.
Why is unearned revenue a liability instead of a revenue account?
Unearned revenue accounts represent the amount of cash received before services are provided. Since services have not been provided yet, it is not revenue. (It represents the obligation for future services in order for the revenue to be earned.)
Accrued rent expense is a liability?
Accrued rent expense is classified as an Expense. It's not classified as a liability. Expenses are paid out of "Revenue" and they affect "Retained Earnings". When you do a Trial Balance before closing out your accounts, Expenses are actually listed with Assets, because all "Expenses" contain a debit balance.There is only one reason an expense would be listed as a liability and that is if you post the transaction before paying it and then the account "Expense Payable" is used and is a liability as it is a "Payable" and actually is not listed with the term "expense" in it. For example if you have Rent Expense, then the two accounts used are Rent Expense and Rent Payable. Notice the "liability" account is actually titled "rent payable" not "rent expense".The term accrued is merely the term used in Accrual Accounting, which simply means that all transactions are recorded as they occur or "accrue" as opposed to cash basis accounting where transactions are recorded only when cash is paid out or received.In actuality if you are trying to classify your accounts, such as the question, classify the following accounts as either an Asset, Liability or Owners Equity Account, Expenses will be classified as an Owners Equity Account as they affect Retained Earnings, which in turn affects Owners Equity (stockholders equity).
What are the types of business transactions in accounting?
~Vivek Kumar Ambastha The Accounting Cycle The accounting cycle consists of the many steps the accounting staff follows, beginning with analyzing transaction and ending with preparing a post-closing trial balance. When the accountant analyzes source documents to determine how to record the business transaction. Thus, the basic input of the accounting cycle consists of the various source documents, including sales invoices, purchase invoices, and time cards for hourly employees. The output from the accounting cycle consists of the financial statements. The three basic financial statements are the income statement, the balance sheet and the statement of owner's equity. Adjusted Trial Balance Adjustments are recorded in the general journal at the end of each accounting period, generally as of the last date of the month. The recorded amounts are then posted to the general ledger account as of the last day of the accounting period. After posting the adjustments, the accountant prepares an adjusted trial balance to prove the equality of debits and credits. Preparation of Financial Statements The adjusted trial balance is used to prepare the income statement and the balance sheet. The revenue accounts make up the revenue of the hospitality enterprise, while the expense account make up the expenses of the business. The difference between the revenues and expenses is either net income or net loss. Net income results when revenues exceed expenses, while a net loss results when expenses exceed revenues. Closing Entries In closing entries the revenue and expense accounts are nominal accounts, since they are sub classification of owner's equity. Accountants separate revenue and expense account to get more detailed information for use in preparing the financial statements. Once the financial statements are prepared, the accountant closes the revenue and expense account, clearing the accounts to zero by transferring the balances to the owner's equity capital account. The accountant closes these accounts with closing entries that must be recorded in the general journal and then posted to the general ledger accounts. There are three basic steps are involved in closing process, they are * Close the revenue and expense accounts to the income summary account. * Close the income summary account to the owner's equity account. * Close the owner's drawing accounts to the owner's equity account. Post-Closing Trial Balance After the accountant records and posts the closing entries, the only accounts with balances that remain in the general ledger are the balance sheet accounts. These accounts must be in balance; that is, the total of debit balance accounts must equal the total of credit balance accounts. To test this equality and to check the accuracy of the closing process, the accountant prepares a post-closing trial balance. As with the trial balance prepared before the closing process, account balances are listed in debit and credit columns and totaled to ensure that debits equal credits.
When Adjusting entries are required?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
Adjusting entries are required when because?
Adjusting entries are required to implement the accrual accounting model. Because accruals involve recognition of expense or revenue before cash flow.
Where in Chart of Accounts do you enter Prelinimary expenses ie liability asset etc?
Preliminary expense are those expense which incurred before start of operating activity so it is called other assets and shown in asset side of balance sheet.
Is there a difference between adjusting entries and correcting entries?
Adjusting entries occur completed at the end of the accounting period, but before preparing the financial statements; so in order for a company's accounting financial statements and records to be up-to-date on the accrual basis of accounting. To show an example, each day the company earns wages expense but the payroll relating to workers' wages for the last days of the month would not be entered in the accounting records until after the end of the accounting period. Also, we know that this company uses electricity each day but receives just one bill per month, perhaps on the 20th day of the month. The electricity expense for the last 10-15 days of the month must be put into the accounting records if the financial statements are going to show all of the expenses and the amounts owed for the up-to-date accounting period. There are more additional acclimating entries amounts that the company paid prior to amounts becoming expenses. For examples, the company perhaps paid its insurance premiums for a four month period prior to the start of the four month period. It is possible the company may have deferred the expense by recording the amount in the asset account Prepaid Insurance. During the accounting period some of those premiums expired (were used up) and need to appear as expense in the current accounting period and the asset balance reduced. With closing entries they are dated as of the last day of the accounting period. However they are entered into the accounts after the financial statements have been prepared. Manly closing entries contain the income statement accounts. The closing entries will set the balances of all of the revenue accounts and the expense accounts to zero. This means that the revenue and expense accounts will start the new year with zero in the accounts, thus allowing the company to easily report the new year revenues and expenses. So we see that the net amount of all of the balances from expense and revenue accounts at the end of the year will be in retained earnings (for corporations) or owner's equity (for sole proprietorships).
The ledger of Piper Rental Agency on March 31 of the current year included the following selected accounts before adjusting entries have been prepared.?
1. Mar. 31 Depreciation Expense ($400 X 3)   1,200 Accumulated Depreciation-   Equipment   1,200 2. 31 Unearned Rent 3,300 Rent Revenue ($9,900 X 1/3) 3,300 3. 31 Interest Expense   500 Interest Payable   500 4. 31 Supplies Expense 2,100 Supplies ($2,800 - $700) 2,100 5. 31 Insurance Expense ($200 X 3)   600 Prepaid Insurance   600
Is rent collected in advance a temporary account?
The account that you would put this rent collection in is generaly called "Un-Earned Rent Revenue". At the end of the period, you have to close these accounts. So yes, it is a temporary account.A quick explanation why:- There are two main types of accounting:1. Accrual - expenses and revnues are recongisd when they ACTUALLY happen.2. Cash based - expenses and revenues are recognised when they are PAID.- Because of this there are "timing differences" which may occur, which can be classified as:1. Acrued revenue - rev. recognised BEFORE cash is received.2. Accrued expense - exp. recognised BEEFORE cash is paid.3. Deferred revenue - rev. recognised AFTER cash is received.4. Deferred expense - exp. recognised AFTER cash is paid.-In the case of our rent collected in advance, this is where you have collected the money for a service before you have given it. This unnearned revenue is a DEFERRED REVENUE which is a LIABILITY account.If you want more info - have a look at accountinginfo.com/study/accrual-101.htm
Customers pay for products weeks in advance so you get the money in weeks before you record the expense for the product How are you supposed to handle this in your bookkeeping?
Show the payment as a credit to the customer in your customer accounts.
E3-7 the ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.?
1. Mar. 31 Depreciation Expense ($400 X 3)   1,200 Accumulated Depreciation-   Equipment   1,200 2. 31 Unearned Rent 3,300 Rent Revenue ($9,900 X 1/3) 3,300 3. 31 Interest Expense   500 Interest Payable   500 4. 31 Supplies Expense 2,100 Supplies ($2,800 - $700) 2,100 5. 31 Insurance Expense ($200 X 3)   600 Prepaid Insurance   600
