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  1. #1
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    Accounting Adjusting Entries help

    I have a few adjusting entries that I am not sure of for my accounting hw..

    Fees Received in advance from clients $6,000

    and

    Services performed for clients that were not recorded by December 31, $4,900

    Would the first one even be recorded? I wasnt sure since I know that is usually a cash entry and cash is not recorded in adjusting entries
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    The first constitutes a liability since you are receiving revneue for services you haven't performed.

    Initial entry would look like:

    -Cash
    Unearned Revenue

    Adj. entry: Debit the liability for whatever amount of services have been performed, and credit whatever revenue account.

    -Unearned Revenue
    Service Revenue

    edit: mother****er, why won't those credits indent??? gay ass forum formats!
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  3. #3
    Goodbye CC IraHays's Avatar
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    Cash: $6,000
    Unearned rev: $6,000


    Accrued Revenue: 4,900
    Revenue 4,900
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    Originally Posted by IraHays View Post
    Cash: $6,000
    Unearned rev: $6,000


    Accrued Revenue: 4,900
    Revenue 4,900
    this
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  5. #5
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    Originally Posted by IraHays View Post
    Cash: $6,000
    Unearned rev: $6,000


    Accrued Revenue: 4,900
    Revenue 4,900
    First one would be

    (Debit)Unearned service rev 6000

    (Credit)Service Rev 6000

    it's an adjusting entry.
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    Everything at the beginning went into unearned revenue.


    You reduce the amount in unearned revenue by the amount of work you completed.
    keep rep trading out of your sig
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  7. #7
    Registered User 2pacalypto's Avatar
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    Originally Posted by NYY View Post
    First one would be

    (Debit)Unearned service rev 6000

    (Credit)Service Rev 6000

    it's an adjusting entry.
    You mean the adjusting entry, right? I think IraHays was posting the initial entry also
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  8. #8
    Registered User Spartan32's Avatar
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    Well heres the thing. The problem already lists the trial balance and just asks for the adjusting entries. In the first one I listed, it does not tell me that I have done any of the work to earn the unearned revenue yet.
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  9. #9
    Registered User leafs43's Avatar
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    Originally Posted by NYY View Post
    First one would be

    (Debit)Unearned service rev 6000

    (Credit)Service Rev 6000

    it's an adjusting entry.
    Unearned revenue is a liability account. Therefore to increase it you have to credit it.
    keep rep trading out of your sig
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  10. #10
    Registered Fistpumper NYY's Avatar
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    Originally Posted by leafs43 View Post
    Unearned revenue is a liability account. Therefore to increase it you have to credit it.
    Yes, but in an adjusting entry it has to be debited and service rev has to be credited.
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  11. #11
    Registered User leafs43's Avatar
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    Originally Posted by NYY View Post
    Yes, but in an adjusting entry it has to be debited and service rev has to be credited.
    Nah. Gotta read it. You got money for services not rendered. Thus you get an increase in cash and you get an increase in unearned.

    Then for when the services are completed, partially, you have to start debiting the unearned revenue to get rid of it. And that is the adjusting entry.



    What you are saying is you are getting rid of 6000 in unearned revenue (a contra account?) on getting the cash with no services preformed.
    keep rep trading out of your sig
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  12. #12
    Goodbye CC IraHays's Avatar
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    Originally Posted by 2pacalypto View Post
    You mean the adjusting entry, right? I think IraHays was posting the initial entry also
    Yeah, I was posting the orignal entry.

    If the company records cash receipts on the cash basis, then the adjusting entry would be:

    debit revenue 6,000
    credit unearned revenue 6,000

    That assumes when the 6k was received sometime in december it was recorded as revenue.
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  13. #13
    Registered User 2pacalypto's Avatar
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    Originally Posted by leafs43 View Post
    Then for when the services are completed, partially, you have to start debiting the unearned revenue to get rid of it. And that is the adjusting entry.
    I think that's what he's trying to say brah. You're both right. The OP just hasn't cleared up whether any services were actually performed or not.
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  14. #14
    Registered User leafs43's Avatar
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    Originally Posted by 2pacalypto View Post
    I think that's what he's trying to say brah. You're both right. The OP just hasn't cleared up whether any services were actually performed or not.
    I couldn't help myself. I'm 16 credit hours away from qualifying to sit for the cpa.


    Of course I don't really deal with problems like this, and haven't really messed with anything like this in 2 years, as they are very basic.


    Now gimme a balance sheet and income statement and tell me to create a cash flow statement, that would give me something to really to chew on.


    A problem like this is more or less to try and get people thinking in terms of t accounts rather then memorizing journal entries. Thinking in t accounts is the biggest benefit ever.
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  15. #15
    Registered User 2pacalypto's Avatar
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    Originally Posted by leafs43 View Post
    I couldn't help myself. I'm 16 credit hours away from qualifying to sit for the cpa.


    Of course I don't really deal with problems like this, and haven't really messed with anything like this in 2 years, as they are very basic.


    Now gimme a balance sheet and income statement and tell me to create a cash flow statement, that would give me something to really to chew on.
    lawl

    how long will it have taken you after your bachelor's to sit for the exam (in terms of credits)?

    i'm graduating this quarter with a double major in accounting/finance. is it like another year's worth basically?
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  16. #16
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    another adjusting entry if anyone has any idea...


    The rental revenue represents the amount received for 11 months for dining facilities. The December rent has not yet been received.

    On the trial balance the amount for rental revenue is 17,600

    Would I divide that by 11 to get 1600 and do this?

    Debit Accts Receivable for 1600
    Credit Rental Revenue for 1600
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    Originally Posted by Spartan32 View Post
    another adjusting entry if anyone has any idea...


    The rental revenue represents the amount received for 11 months for dining facilities. The December rent has not yet been received.

    On the trial balance the amount for rental revenue is 17,600

    Would I divide that by 11 to get 1600 and do this?

    Debit Accts Receivable for 1600
    Credit Rental Revenue for 1600
    Can someone double check this? That's what I would put but I'm not positive. I am very new to accounting and have a test coming up next week so brushing up on some stuff
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    Originally Posted by IraHays View Post
    Yeah, I was posting the orignal entry.

    If the company records cash receipts on the cash basis, then the adjusting entry would be:

    debit revenue 6,000
    credit unearned revenue 6,000

    That assumes when the 6k was received sometime in december it was recorded as revenue.
    this
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