COMM 457 Lecture Notes - Lecture 6: Interest Rate, Accrual, Trial Balance
Document Summary
Assume: company has a dec 31 year end. Example 1 yes ,000 of work hasn"t been recorded. Example 2 customer paid ,000 during year for some services. Trial balance would show unearned revenue 5,000 cr. Determined that %60 of services have been provided. Example 3 same case facts as example 2 but. At year end: %60 of the work is done. Example 4 assume ,000 of legal expenses have been incurred but not yet recognized as an expense. Account liability (incase the company hasn"t received an invoice for the legal services that they received yet) Loan take out nov 15: terms interest payable yearly, year end dec 31. Nov 15 to dec 31 (year end) is approximately 1 and half months (45 days) Therefore the interest would be 1,000 per month. Employees paid in full up to and including dec 27th. # of employees * # of days owed * daily rate.
