Leaning Online

The correct answer is (B), as at the year-end, the following Adjusting Entry to recognized Estimated Uncollectible Accounts are recorded as shown below:       Uncollectible Accounts Expense a/c  XXX                                         Allowance For Doubtful Accounts a/c  XXX      (Allowance For Doubtful Accounts Are Adjusted At The End) Here Uncollectible Accounts Expense is an estimated expense account which decreases equity on balance sheet and Allowance For Doubtful Accounts Account is a Contra Asset Account which decreases Accounts Receivable ( Current Asset ) on balance sheet. So, the correct answer of this MCQ is (B).

The correct answer is (D), as Relevance and Reliability are the most primary qualities of accounting information in which Users of Financial Statements or Accounting Information are most interested as they need relevant and reliable information to make decision, i.e., whether to invest in the shares of company or not, the investors are interested in the relevant information i.e, dividend policy, return on equity, etc., and the reliable information i.e., the company paid dividend to its shareholders annually, company make payments regularly, etc. Relevance is the most important Accounting Concept which states that accounting information should be relevant to concerned parties in decision making purposes. Relevant accounting information is required by users of accounting information to make financial decision.   Reliability accounting concept states that information presented in the accounting records is trustable. Users of financial information get the reliable information from...

The correct answer of this Multiple Choice Question is (D), as the company / corporation received $10,000 for cash from clients in advance and still the services against the amount received are not performed. As the services are not rendered to clients, so the company yet to be earned revenue. So, unearned revenue account is created. Under Accrual Basis of Accounting , we record a Business Transaction whether the cash is received or not. So, we debit cash account of $10,000 and credit Unearned Revenue Account of $10,000. Cash of $10,000 is received in advance against the services which are still not be performed, so we create a second account which is Unearned Revenue of $10,000. As cash is increasing as it is coming into the business, so we debit it and credit  Unearned Revenue Account  as a  Liability  because now the company is liable to perform services against the cash received in advance. So the liability of the company to perform services is increasing, so...

Journal Entry For “Received $250 Telephone Bill For Previous Month, To Be Paid Next Month”. When the company received telephone bill of $250 to be paid next month, then it is a Current Liability ( Telephone Bill Payable Or Accounts Payable ) for the company to pay the telephone bill for the previous month used (Benefits Enjoyed represent Telephone Expense) by the company during that period of time.             Telephone Bill Expense a/c  $250                                                             Telephone Bill Payable a/c / Accounts payable a/c  $250                                             (Telephone Bill Expense Accrued For The Period) Effect Of $250 Telephone Bill...

A Company Received $800 From Clients Who Were Previously Billed For Consulting Services Provided / Who Had Previously Purchased Services On Account. Prepare The General Journal Entry To Record This Transaction | Short Question Answer Initially, when the company billed for consulting services provided, the company earned the Revenue but as the amount is due from clients, so the company record the Accounts Receivable Account. So, the company debit Accounts Receivable Account and credit Consulting Service Revenue Account . But, now the clients paid the amount in cash and the company received the payment for consulting services rendered by the company to clients, so we record the following journal entry as shown below:                                                         Cash a/c  $800             ...