which-of-these-transactions-requires-an-adjusting-entry-debit-to-unearned-revenue-a-revenue-earned-b

Question

Which of these transactions requires an adjusting entry (debit) to Unearned Revenue?
A. revenue earned but not yet collected
B. revenue collected but not yet earned
C. revenue earned before being collected, when it is later collected
D. revenue collected before being earned, when it is later earned

Puneet Prajapati · Accepted Answer

Okay, so we are going to understand the golden rule. Okay, so these rooms have accounting will be applicable throughout accounting as a subject. Okay. Ciclista fun. We went up that I think it would be easy going mistake. And there is also one more thing that there is no very substantial logic behind that. Why? These are rules framed like this. And why so do not have such confusion. Okay, just take a note of that. And when you will practice mold, you will get hand off. Okay? So increasing expenses and a sex, we will give it to them in case off degrees, expenses and the stakes be even give up that I did with them. So these are simple rules. Like whenever they will be increasing expense. Like whenever the business center people, you know, in car such expenses or purchases Somerset&#x27;s than those who constantly deputed and they will be They&#x27;re neat or corresponding reduction in expenses in Essex. So we&#x27;re doing so they don&#x27;t find types of pounds. Me 1st 1 is SX, then second, his expenses so increasing liability Okay. Capital and revenue. There is a corresponding credit. Okay. Whereas engaged over reduction in liability. Africa and revenue problems. There is a corresponding never. Okay, so the first rule off second. So the second door stairs that increasing liability capital and revenue account. We&#x27;ll have. Okay. Did anybody first and corresponding? Angry do, However, these we will understand that. Okay, so let&#x27;s take example to understand the situation. Let&#x27;s suppose there is mystery. Okay, Who is that? You know Oh, but or not our business from nature. Okay, Now what happens? There is a second old superstar. There&#x27;s a second bus and Mr Being So what happened? So Mr Beef frequently purchases for nature, perhaps from Mr Be like J R. Stables. Okay. On sort of products on Mr Biesecker. Okay. I will pay you advance money. Okay. I&#x27;ll be your advance money in this in this financial year. And you can do you even it up. Words like chairs and tables in next financial. So everyone&#x27;s money has been received in financially, but delivery will happen in financial year. Okay. No, what happens then? This. So there are two separate randich. And first, when you first witness deceit advance money and 2nd 1 is delivery will happen. So? So in current in financial year, then this advancement. He has been deceived. We will not recognize the value of goods and services as income in books of accounts. He okay, But when delivery will have been in next financial year backed amount, which has been recorded and financially, everyone, they will be an adjustment in three. Record the income in financially or two. Okay, so who convert the amount that has been recorded in financial year into income off financially, they will be just vanity. Okay, so in that case, so I just one entry will include or we can say, with the state. McDavid who? Lebanese vehicle, How Nixon to stay. Okay, so let&#x27;s understand, Exposed that if Mr A has received word wants money from Mr B. So they&#x27;re increases a liability off mystery. The words, Mr B. Off off delivery, off chairs and tables to Mr Be. Okay, so they&#x27;re increase a liability. And what we have said, if there is increasing liberty, they will give up. We will give up, ready to them. Okay. Now, in case off adjusting and re when we will convert the advance money into income over an engineer too, because whenever there delivery will be made that they never knew or the advance money that has been received in financially of one. Okay, will be recognized as income in second financially. Yet based on the delivery made by mystery for listener be okay. Now, In that case, if there is adjustment Anti so there will get gonna spending Dabiq to the same account. Which, which hag? The crediting, for instance instead. Okay, so that&#x27;s how we do in the campaign. Like, let&#x27;s suppose advance advance payment. Okay, so we have. So let&#x27;s say so. We haven&#x27;t seen the advance payment, okay? No one ever. They will receive advance payment before delivery a woman&#x27;s offices. It will create a liability having a day of work off delivery of goods and services to estimate. But then in next, financially and supple lets it. This is a matter often interrogated, and we have come through financially. No one. We will deliver the goods and services so far in peace and liberty, they will be a petting. Okay, okay. Now, in case of delivery, they really direction in liability by because for fear as a liability, its delivery off goods and services to estimate mr me No, we believe a corresponding damage to them That would do the same in advance and payment. First of all, it will get credit. Then it will get double for the same. All. Okay, so back matches rip. Okay, So the whole process his Mac matches with choice. The for the current question that this the ankle that has bean collected. Okay, so they income has been collected in advance in financially oven. However, it will be recognized in financial year. Who? Okay, based on the delivery of goods and services to Mr Be. Okay, that&#x27;s all forever. Solution. However, we have the right. Joyce G is correct. OK, thank you.

Puneet Prajapati · Answer

because you&#x27;re going to this day The concept Outstanding living You Okay, so we will write a technical at first Bordered by that we didn&#x27;t Mr. Okay, What is the alone against the words the business in today has a little white big who would send So this is you leave us do it however, but the end to be has not they see the Okay, so we Everton our technical division and got pixies. The abstaining revenue is the amount against which the business entity has delighted season services We customer But what happens? The entity has north received payment. It means the customer hasn&#x27;t yet baby among the position. So let&#x27;s understand. However it is clear, it is very clear from the definition. Okay, but we will understand toe an example of statistical data mystery. And it is Mr Thanks. Mr has delivered some goods and services. Thank you. Oh, but $5000. But what happens? Mr. X said Mr A, that he will pay off within Vinyard within two years depending on the business to business case. Okay. No, these $500 will be considered as outstanding living. Okay, that back which has to be collected from Mr X. So the Evin district people insect off outstanding that many so in the present gave the solution Matches with joys be okay because our standing revenue and cruel it could order every new. I didn&#x27;t change a bit. And you can I don&#x27;t she number one check number or your notebooks for future reference. And that&#x27;s on for our solution. Thank you.

Puneet Prajapati · Answer

Okay, so we are going to understand the concept off outstanding expenses. Okay? No. What about the UPS turning expenses. We will first. Right? Our technical jim ordered by that we will have our example who make the decoration is the mold. It is the a mode for which the best the business entropy uh, yeah is a very has a really services for the business. Entity has a very self icis general delivery, like such a moment is yet me big. Okay, so this is this is this is the most important part off the definition as well as the content. And we would understand she your definition Hold exam. So let&#x27;s is you. That date is up going green. Okay. I v c don&#x27;t me no water. What? It did that. It&#x27;s mostly opening. Sorry. It&#x27;s mostly operates on telephone services. Okay, so these telephone services I&#x27;ve provided by Mr Beef Okay, who is this service provided? Now what happens? I basically me has a very the services ornament, general, but service charges? Yeah, not being yet. Okay, So what? We have another example that we have i d c company that mostly operates, begins the most independent from eloquent services. Bitch. I provided by Mr B. Okay, Now I physical. He has a very revolt services off month of gentry. But this service, its service charges have not being baby yet. Okay, Now, in order to a phone for such expenses what, you will have vehicle record. Lexus opposed the building off generally month. Was it out? I wondered. Notice. Okay, so these $500 will be recorded as outstanding expenses. Okay, so $500 will be recorded as off standing expenses in the current financial year. Yeah, you contracted it. So $500 will be the mechanized death. Outstanding expenses in the current financial year. However, whenever these $500 will be here, that&#x27;s a supposing financial year two. Then we will recognize them as expenses on leave in charge. Interest. It turned a profit and loss in financially that this subsequent. Okay, so we have that. I&#x27;ve never seen you ship. So in the present case that matches back matches with Joyce Joyce, okay, because our standing expenses are spending expenses and accrued expenses are indeed are interchangeable. Okay. So you can write down technical declaration in check. Example in sheet number who are being or books for Gela prints. However, the correct choices. Choice. Okay, that&#x27;s all part of a solution.

Puneet Prajapati · Answer

we&#x27;ll get him. Let&#x27;s understand the current solution. Crumbs from the rules. So we have diamond roots of company, okay? And buy diamond rules of accounting. Before that, they will understand why the diamond was by the by. We have diamond rules. Okay? These rules are are to regard General Yankee in the books of the problems of the company. Okay, so first of all, meeting right, increasing a sex queasiness there&#x27;s on expenses will always be there to die like men. We will have when we will have increasing a sect and expenses with these type of accounts. Then be left debit and three of those items. Okay. However, if they will be decrees and asset and expenses accounts, so they will be credited on Lee that. But we will be considering that. Okay, So sorry for the disruption. So, in easing liabilities, cabinet and live in you, we&#x27;ll always be credit. You need to write it down. So that didn&#x27;t any case. If you will encounter with some problems so that given so that you&#x27;ll get to revise it before the exams. So forget it. Who so degrees in liability? Capital revenue for peace. David, Now in the current question What we have been given that what will be that? Gotta spending which of the falling tarnishing questioned, evident and tried to cash. It means, David every means. So get cash is what gashes consider under six. Okay, what is gang minutes like this? Being your first cash is nothing but the balance maintained by the entity. Okay, The balance maintained by the entity for day to day for the directive. It isn&#x27;t in any business entity. Okay, so balance, mundane a d and D. So that is considered as an insect. Okay, so what, you&#x27;re saying that whenever they will be increased in a sex, so they will be a debit. Who guess? Okay and credit. Do the party from which be receiving the guests. Okay. From which we are receiving cash. Okay. No. So, John, they&#x27;re falling. So? So the correct choice expert, that detail, unless is we have just done. But it Joyce problem 37 for Colin Techniques. Heaviness. See? And how Howard will we see? Because we have collector balance. Really? That&#x27;s tomorrow. What is balance? That&#x27;s understandable. Let&#x27;s say suppose we have sold some goods or services or select city have sold some foods and beverages to our customers. But the customer is saying that pay you off after a certain period of time. Lex. Detective Hayes. Now, in that case, the balance becomes recovered from the customer. Now, whenever we will recover the balance of the customer, it will become s inform off cash into our cash reserves into our cash holdings. Okay, so that is why so we will have increasingly sex because cash is considered as an insect. Therefore daily, they will be adapted to the guess. Okay, so that&#x27;s all for the solution. Thank you.

Puneet Prajapati · Answer

Okay, So via understand, Do you mean routine? Okay. And how do we arrive? The do you know things better? It&#x27;s OK. It lead these names. The net effect off revenue and expenses off the business in kitty. In addition, showing their dividend about okay. However, be everything technical definition here, okay? And that technical definition into many concepts, and we will understand it through a simpler example. Okay, let&#x27;s suppose the result There is a company, ABC, help me who is dealing in selling blankets. Okay, So if there is a business, so of course, there is a motive to UN profit also. Okay, so the one profit B B first off all happen, but she has some raw materials who produced blankets. Okay, Then we will find customers to sell the plan case. Okay, so what? We prepare, actually, So we would ve been village in this statement. Okay. Viva paid up. Gender statement. Very. We have one site is the revenues. Which region braid from sail off blankets. Okay. Interesting. Come like we have, like, we have deposits with the bank savings accounts with the bank. So interesting ideas from those deposits. In addition to wear, we have it all for it. Don&#x27;t say it off. A sick and likewise many off items. Okay, so in business, generally these components okay, give rise to the revenue. 40 business. Ok. However, to run the business, we have to income many of the expenses. Yes, I have redone the items on the basis of their priority. Okay, so sale from the money from the sale of blankets, it&#x27;s on the top. And according to you Okay, who started putting person? Come on, staff a property. Now let&#x27;s come first drama TV and there is a business of selling lengthen drama today will be the first most expensive bordered by that station ity. Okay, stay city. Okay. Drinking expense. Now what happens after writing such statement? We either be end of it. Perfect, okay. Or loss. Okay. Know what happens before delighting this profit and loss at this general statement? 11. Okay, district whatever. Be closed on these expenses And these individuals who in Go somebody okay? Please write it down. Lose all items who income somebody. And how do we close down on the items to income summary bypassing the closing imprints. Okay, we will understand how to pass the closing and peace for each item. However, you can industry that these are all the items in the general statement will be transportable Incomes somebody by passing close again, shouldered by that all the items income somebody will be transferred. Who detained earnings? Okay. Who detained in encircled by posse closing it. Okay, so this is the main conclusive definition behavior in here. Okay, after writing the technical definition after understanding them being example. Okay, Please record out. They shoot number Verne do as well as three on being a books off the jet difference. Okay, so take a load off this statement that all the incoming drip in common expenses will be transferred to retain the links on a yearly basis. OK, because you prepared uninterested ones on a yearly basis. And how do we close the income? Somebody items retained by passing, closing empties. Okay, so our solution matches with Joyce V that this losing empty. Okay, So Joyce&#x27;s correct. That&#x27;s all

Puneet Prajapati · Answer

Okay, So in the current case, we will understand that did. And how many types of oppose Okay, forward by that people in this time, they were pipe off balance. We have for each off the type of a campus. Okay, so those balances will be the four balances for those ACOs and in an actual Also, we have only five type of occam&#x27;s throughout the accounting as a subject okay, with. So I&#x27;m classifying the same little towns which will have similar different balances. Okay, so you&#x27;ve been right down this because it is one of the golden rules in accounting to classify. All came to understand the balance off so they don&#x27;t. Five typical five type of becomes, as initially, I have said First is a six second expenses. Hurley&#x27;s liabilities, second its capital and then is okay, so a certain expenses will all vase on Venice. The always it means 99.9% would have Deborah dependence. So there is 0.1% chance that it will a credit balance. It&#x27;s a very rare case. And the real cases, I will let you know, followed by the explanation. Okay, So I certain expenses will have de rebellions all the times, Okay. Except for today, with their names, liabilities, Capital and 11 move will always there splintered. But it&#x27;s some of you may think that Why my don&#x27;t liabilities step. Italy revenue will have balance and vice versa. So because this is the methodology, okay, the accounting practitioners have not picked. Okay, so we will not oppose logic that how thereby Canvey, you know, reversed the position off the balances for liberty capital revenue in the second expenses. Okay, so we will Lord give much of a single back and being generally just mugger it because in practice, this concept will be a living for us. Okay, They will live with logics when we will face practical problems. So these are the is these every five accounts we have and followed by that being in the air the type of business in divorce for each of the now what happens in the business? In a business, there is a gender statement every convicted. Okay, So business is actually established. The one the prophet, if there is no profit, so there will be no use case off the business. OK, so this is mostly the critic site, and this is mostly the damage. So we have just seen on the never excited what we have. We have expenses. So this is the statement on a cold day Generally prepares, okay, To arrive at the profit or loss MIT Mir at the end of an engineer. So sail off goods and services. And this is the new site, which comprise off sale of virgins. Have something with business in which business under Dean&#x27;s okay, expenses could be the all material And like vice. Okay. Okay. So you know what happens now? What happens then? When accounting, Right. All of the items under that big site as well. It&#x27;s good. It&#x27;s a So the counting does not understand this. Really? Vincey. So it transferred all of the items in the in the statement income somebody account. If you consider income. Somebody on the north comes from here. Okay? Income. Somebody who are either deep profit thought knows made at the end of Okay, so we haven&#x27;t destroyed this, That I think that exactly will record our expenses. What we haven&#x27;t heard on the profit. And I think that inside we will write the sale items like that bottom old. For what amount? We have sold our goods and services to our customers. And all of the items in this statement will be closed or begins with people transfer. All of that comes to income. Somebody no more happens. Who plans for the amount? What happens if their revenues having a credit sales? Okay, so every item on the credit side will be debited next door. That idea. Okay. Next, Right here. And you can also record down. So that would be better for your future reference. So I&#x27;m writing with a green pen. Okay for closing. So close the items on the credit side vehemently. De pick those items and give up the rest. Forming credit to income. Saudi is there a Kia? Okay. And to close the items on the very day woodside variable. But I didn&#x27;t those items and give up the responding income somebody. It is just the oppose it off. What? Hear what you have done. Okay, so we can also write it like lettuce opposed. A certain expenses are having never balances. So I&#x27;m writing down with the right penned that what we have to do to close down the accounts. Okay, so we will credit. He could be a sitting expense. Typically in going somebody who lose their state and expensive. And we will Look, David E liabilities Capital have been who closed down to the income somebody. Okay, so what we have in our solution also. So our solution for current Kocian matches with choice deep. Okay, So to close down, the fees are Okay, we will close down, do the income summary. Okay? Because all of the items in this statement will be closed down too. Income. Somebody here. Okay, so that solution matches with choice d. That&#x27;s all part of a solution.

Problem 15 Hard Difficulty

Which of these transactions requires an adjusting entry (debit) to Unearned Revenue?
A. revenue earned but not yet collected
B. revenue collected but not yet earned
C. revenue earned before being collected, when it is later collected
D. revenue collected before being earned, when it is later earned

Answer

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Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting