Leaning Online

 Solution: The correct answer of this MCQ is A), as post-dated checks / cheques are encashed or deposited into bank only when the date mentioned on it arrives. When the company / corporation received it, it is considered as an assets ( Account Receivables ) from which the company will get benefit on stated date. It is a promise from clients to pay to company on given date. It can be considered as a promise or evidence of Advance Payment to be received on the specified date stated on it. The clients / customers are still liable to pay to company in case of Dishonor of Checks. Post Dated Check / Cheque Journal Entry Before the arrival of specified date mentioned on post-dated check or when it is received from a customer, the company neither records it as a cash receipts nor reduce the balance of Accounts Receivables, so there is no Journal Entry to record in the Books Of Accounts . So, there is no effect on Accounting Equation and Financial Statements . However, on sp...

Owner Distribution Is What Kind Of Account? Owner Distribution is an Equity Account (D option is correct), as it is paid to business owners out of the profits retained in the business as a claim or rights of the owners of the business against the assets of the business. Owners get the share of their investment in the business. For example, three (3) owners are given $500 (5% of $10000), $200 (2% of $10000) and $100 (1% of $10000) according to their share of investments in the business. When the business is in profit, then it is favorable to give the return of share to owners. However, in case of loss, it is not considered as an ideal situation to distribute the amount of cash to owners for the investment made in the business as the funds are needed to carry on the business and to sustain and maintain the business. Owner distribution is recorded on balance sheet as a deduction from owners equity. Difference Between Owner Distribution And Dividend In case of profits, Dividend...

Solution Of Multiple Choice Question (MCQ) Correct Answer: D. $9,000 Understanding unearned revenue is a common challenge in accounting exams and multiple-choice questions. The key is to determine how much of the payment has been earned by the end of the accounting period and how much still represents an obligation to provide future services. Step 1: Understand the Scenario Contract value: $12,000 Contract start date: October 1 Contract length: 12 months Payment: Received in full on October 1 Accounting method: Accrual accounting Reporting date: December 31 Since the company receives the entire payment upfront, it cannot recognize all $12,000 as revenue immediately. Under the accrual method, revenue is recognized only as the company provides the agreed-upon services. Step 2: Calculate Monthly Revenue The contract covers 12 months. Monthly revenue = $12,000 ÷ 12 = $1,000 per month From October 1 through December 31 , the company has completed 3 months of service. Revenue ea...

Answer To The Question The journal entry is to debit Legal Expenses Account of $4000 and credit Accounts Payable Account Or Sundry Creditors Account of $4000, as the legal firm earns revenue by rendering services to you (client) but the payment is not received from you for Legal Services performed. The legal services provided by the legal firm are legal expenses for you (client). So, from the point of view of client, legal expenses are debited as these are increased while accounts payable account is credited as the client is bound by law to pay for the services rendered by the legal firm. So, the Liability Account i.e., Accounts Payable Account are increased according to Rules of Debit and Credit. This journal entry is made on Accrual Basis of Accounting in which a journal entry is recorded whether the cash is paid or not, received or not. When the company incurred expenses or earned revenues, we record in the books of accounts.