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A Contra Account is not a Nominal Account as it is not an expense account which is related with nominal account. A contra account is also not a personal account as it is not related with the living or natural persons. Yes, a contra account is a contra real account as it is the reversal of relevant revenue, expenses, assets, liabilities and equity accounts in income statement and on balance sheet such as sales allowance is deducted from gross sales in income statement and allowance for doubtful accounts is deducted from the ending balance of accounts receivable on balance sheet. So, we can say that a contra account is a Contra Real Account and not a nominal or a personal account.

A Contra Asset Account is t he reversal of releva nt asset accounts. Major examples of contra asset accounts include Allowance for Doubtful Accounts , Accumulated Depreciation , Accumulated Amortization , etc. What Type of Account is A Contra Asset Contra asset account is a contra real account as Real Accounts are related with asset accounts.   Do Contra Assets Go On The Balance Sheet A contra asset account goes on Balance Sheet as a reversal of relevant asset account such as allowance for doubtful accounts is deducted from closing balance of Accounts Receivable , accumulated depreciation is deducted from the cost of relevant fixed assets / non current assets on balance sheet. So, we can say that a contra asset account is a contra real account and it is a reversal of relevant asset accounts on balance sheet.

Depreciation is not a real account as it is not an asset account which is considered to be a real account account. It is also not a personal account as it is not related with natural or living persons. Yes, it is a Nominal Account which is charged to expense for the period and recorded in Income Statement. Actually, all the expense accounts are considered as nominal accounts. It is just an estimation of the cost of a Fixed Asset that a percentage of the cost of the non current asset will be reduced every year. It is a non cash item in Income Statement as it does not involve cash account in the adjusting entry. So, we can say that a depreciation is a nominal account and not a real and personal account.

Accumulated Depreciation is not a Nominal Account as it is not an expense account for the period. It is also not a personal account as it is not related with the natural or living persons. Yes, it is a contra  real account (deducted from relevant fixed assets on balance sheet) as it is the reversal of relevant fixed or non current assets (which are Real Accounts). It is deducted from the cost of fixed assets on balance sheet. It is the sum of depreciation of all the depreciation charged for the year. It is a contra asset account means it is deducted from the cost of the non current asset on balance sheet. It shows the estimated aggregate cost of the fixed asset over its useful life. So, we can say that accumulated depreciation is neither a nominal account nor a personal account but, in fact, it is a contra  real account.

An unclassified balance sheet shows only total of assets, liabilities and equity and we get only overall information of these Accounts while a classified balance reports more details about components of balance sheet (Assets, Liabilities & Owners’ Equity / Equity) by providing subgroups and subtotals of permanent accounts on a specified time of a specified date. For a reader of financial statement, unclassified balance sheet does not provide full information of accounting data as more details of assets, liabilities and equity are missing while in case of classified balance sheet subcategories and subtotals of assets, liabilities and equity are shown. Unclassified balance sheet is a simple and basic type of Financial Statements while classified balance sheet is an advanced form of this unclassified balance sheet with more details of assets, liabilities and equity i.e., we find out classification and subtotals of assets and liabilities, long-term investment, equity, etc. ...

A classified balance sheet lists assets in the Order of Liquidity as, firstly, the most liquid assets such as Cash come always at first, and then least liquid asset from the previous one come in the second and so on. The second most liquid assets after cash are cash equivalents, accounts receivable, which are converted into cash very quickly within one year. After current assets, long-term investments, fixed assets / non current assets and intangible assets are listed as these are less liquid as compared to current assets. Investors are interested in the liquidity of assets as the company has cash in hand for improving Working Capital and can finance different running projects that are necessary to run the business successfully and to get a fair return after financing these projects. So, a classified balance sheet lists assets, including both current and non current assets in the order of liquidity i.e., the most liquid asset comes at first and then less liquid asset come...

A Classified Balance Sheet Organizes What Type Of Accounts And In Which Category? A Classified Balance Sheet arranges or organizes  Assets ,  Liabilities  And  Equity  into subcategories or subgroups. Firstly, we record current assets, then long-term investments and lastly we record shareholder equity. A list of these subgroups are shown below:     Assets   (i) Current Assets (ii) Long-Term Investments (iii) Non Current Assets / Fixed Assets (iv) Intangible Assets   (v) Other Assets   Liabilities & Equity   (vi) Current Liabilities (vii) Long-Term Liabilities (viii) Equity In order to analyse a company financial position  on a specified time of a specified date , subtotals of accounts i.e., assets, liabilities and equity are categorized in a classified balance sheet and such classification is based on particular industry in which a company is operating. Such representation of balance sheet accounts helps the ...

  Closing entry of Income Statement with a debit balance means that there is a net loss incurred by the business during the accounting period. So, to close income statement with a debit balance, we need to credit income statement and debit Income Summary Account as it is transferred to Income summary account, which is a temporary account, and such debit balance represents a Net Loss which is deducted from opening retained earnings in Retained Earnings Statement . The closing entry to close income statement with a debit balance to income summary account is shown below:                                                               Income Summary a/c  XXX                                               ...

  Unbilled Receivable is recorded for those revenue earned by the business against the goods sold or services rendered but the payment is not received from clients and also from the company’s business, the bill is not invoiced to customers or clients while a Revenue is the price of goods sold or services rendered to customers in the current accounting period. Unbilled Accounts Receivable is a current asset shown on balance sheet while revenue is recorded in Income Statement as it is a temporary account. Unbilled Receivables is a permanent or Balance Sheet Account while revenue accounts are nominal or Income Statement Accounts . Unbilled Receivables is not closed until the business is closed while the revenue accounts are closed at the end of the accounting period as these are temporary accounts.

U nbilled Revenue is created when the company earned the revenue against the goods / merchandise sold or services rendered to clients but neither the payment is received from clients nor the company issued or invoiced the bill to clients / customers while in case of Unearned Revenue , the company actually did not earned the revenue but, in fact, it received the payment from clients in advance and still the goods are not delivered or services rendered to them. Unbilled Revenue is a Current Asset and shown on Asset side of Balance Sheet while Unearned Revenue is a Current Liabilit y and goes on Liabilities & Equity side of balance sheet. The time period of unbilled revenue is usually short , i.e., 5 to 10 days, while for unearned revenue, it is within one year. Unbilled revenue is also known as Unbilled Accounts Receivable while Unearned Revenue is also called Revenue Received In Advance.

Unbilled Legal Fees or Unbilled Legal Fees Receivable is a Current Asset for law firms, lawyers or attorneys who already provided the legal services to clients but still the bill is not invoiced or issued to them for the period. Unbilled Legal Fees is an example of Unbilled Revenue for law firms. For example, a law firm provided legal services to its client, Mr. A on 3 rd March, 2021, but the bill is issued to client, Mr. A on 10 th March, then from 4 th March to 9 th March 2021, the legal fees is treated as unbilled legal fess receivable from Mr. A against the legal advisory services, legal aids, etc. Unbilled legal fees is recorded on balance sheet as a current asset.   The journal entry to record it is shown below: Note: As for a law firm, legal fees received is a direct revenue, so we can also use Unbilled Accounts Receivable Account and Sales Account instead of Unbilled Legal Fees and Legal Fees Received / Earrned respectively in the adjusting entry.   ...

In preparing Post Closing Trial Balance , all the Permanent Accounts or Balance Sheet Accounts are listed because all the temporary accounts are finally closed to Retained Earnings Account i.e., the difference of revenue accounts and expense accounts resulting either the net income or the net loss and dividend account are transferred to retained earnings account. Permanent accounts or balance sheet accounts include assets, liabilities and equity. A post-closing trial balance is prepared to list assets, liabilities and equity before the start of the new accounting period. So, a post-closing trial balance is prepared to show only permanent accounts but it does not include all the temporary accounts such as Revenue Accounts, Expense Accounts, Gains & Losses as it is prepared after recording adjusting and closing entries or after preparing Unadjusted and Adjusted Trial Balance for the accounting period.

  In closing entry process, each of temporary accounts (Revenues, Gains, Expenses, Losses, etc.) are closed to Income Summary Account except Dividend Account because dividend is a distribution of share of net income or net profit among the owners of the business in other words we only calculate dividend, if we know what is net income for the accounting period. Actually, dividend is related with the share of earnings among shareholders during the year, so it is transferred to Retained Earnings Account. Also, the dividend account is a Contra Equity Account which is deducted from equity. In case of Sole Proprietorship or Partnership, drawings is deducted from owners’ equity on balance sheet. So, each of Revenue and Expense Accounts is firstly closed or transferred to Income Summary Account and then to Retained Earnings Account at the end of the accounting period except dividend account which is only transferred either to Retained Earnings Account as in case of a comp...

What Is The Balance In Income Summary Will Be, After The Revenue And Expense Accounts Have Been Closed? The Carried Down Balance  ( Balance  c/d)   in the Income Summary Account before it is closed will always be equal to the Net Income Or Net Profit of Income Statement / Trading & Profit And Loss Account , otherwise, you did a mistake or an error in preparing the income summary account. Actually, the income summary account is a summary of all revenues and expenses accounts transferred from income statement. So, the difference between revenues and expenses resulting either a net income / net profit or a net loss. When revenue accounts exceeds expense accounts, the resulting figure will be net income and when expenses are more than revenue accounts, then the business faces loss during that accounting period. For example, if your income statement shows you the net income of Rs. 10 million, for a accounting then the balance in income summary account must...

  Unbilled Accounts Receivables is a Current Asset for the business as it is an unbilled revenue receivable which is earned by the business but the bill is not invoiced or issued to clients / customers for the goods sold or services rendered. The period during which, the bill is not issued to clients / customers is unbilling period and the revenue earned but not received is treated as an unbilled revenue which is a current asset and shown on Balance Sheet . Unbilled Receivables is different from Accounts Receivable as in case of accounts receivable, we issued invoice to our customers but the payment is not received against goods delivered or services rendered. So, being a current asset, u n billed receivables is shown on balance sheet and when the bill is issued to customers, then it is closed to accounts receivable account for the accounting period.

What Is Unbilled Revenue In Accounting / Unbilled Revenue Adjusting Entry / Is Unbilled Revenue A Receivable? Unbilled Revenue means that the company earned the revenue (e.g., fees earned) for the goods sold or services rendered to clients but still the bill is not invoiced to clients for the period. It is a Revenue Receivable from clients / customers against the goods sold or services rendered to them. Example If a company completed a project for a client on 5 th September, 2020, but the bill is invoiced to him on 10 th September, 2020, then from 6 th  September to 9 th September, the company records unbilled revenue for the services delivered / rendered to client. Unbilled Accounts Lists / Examples Unbilled Fees, Unbilled Legal fees, Unbilled Accounting Fees, etc. There are two possible journal entries to record for unbilled revenue, which are shown below:   1. When the Bill is not invoiced to Clients / Customers Unbilled Receivables Journal Entry...

Closing Entry For Sales Revenue Account As Sales Account is a temporary account, so it is closed to Income Summary Account at the end of the accounting period. Sales reve nue closing entry is recorded when closing entry process is started after all the financial statements are prepared. As, the normal, usual or positive balance of sales revenue account is credit, so in order to close it we need to debit it and credit income summary account. Following journal entry is recorded to close sales revenue account as shown below:                                                                                Sales a/c  XXX                                             ...