MGMT 30A Chapter Notes - Chapter 4: Trial Balance, Deferral, Uptodate
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MGMT 30A Full Course Notes
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Types of adjusting entries trial balance: each account is analyzed to determine whether it is complete and up-to-date o analyzes the accuracy: means debits and credits equal/match up, doesn"t necessarily mean they are correct. Deferrals are either: o o prepaid expenses or unearned revenues. Prepaid expenses payment of cash, that is recorded as an asset because service or benefit will be received in the future cash payment before expense recorded. Prepayments: o o o o o o insurance supplies advertising rent equipment buildings. Cash basis accounting isn"t permissible within the gaap. Unearned revenues receipt of cash recorded as a liability before services are performed cash receipt before revenue recorded. Unearned revenues: o o rent airline tickets: magazine subscriptions o customer deposits decrease (a debit) to a liability account and increase (a credit) to a revenue account. Accrued revenues revenues for services performed but not yet received in cash or recorded revenue recorded before cash receipt.
