Ch. 3.docx

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Department
Accounting
Course
ACCTG 211
Professor
Michael Ridenour
Semester
Spring

Description
ACCTG 21 1 Chapter 3   ­Adjusting Entries: ­Pre­paid expenses= Supplies, Rent, Insurance (Asset) ­Honor and Revenue= Someone pays for delivery ahead of time ­Accrued Expenses= Use of resources without paying (Salaries) ­Accrued Revenues= Things we have earned, but have not paid for ­Depreciation= Taking expense for fixed asset (Truck) NOT LAND ­Adjusting entries never have “Cash” ­Un­earned revenue (Liability) ­When we owe a service to someone since they paid us ahead of time EX: Deliveries, Rent, Insurance (for months/years) ­Dr= Debit ­Cr= Credit ­Bought $2,000 supplies on account, used $1,240 of them by the end of the year Dr Cr Supplies $2,000 Accounts Payable $2,000 Supplies Expense $1,240 Supplies $1,240 ­Paid $360 for 3 months of rent in Dec, used 1 month rent by the end of the year Dr Cr Cash $360 Unearned Revenue $360 Unearned Revenue $120 Earned Revenue (Rent Revenue) $120 ­Paying Employees Salary: ­$2,000 a week, year ends on Wednesday. Only 3 days worked, so    2000*(3/5) =1200 Dr Cr Salary Salary Expense  $2,000
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