F1 M8 - AJE

Question 1

What is deferred revenue?(Unearned)

Answer 1

Cash is received before the revenue is earned

Cash moves first
Cash received - service not performed

Question 2

What are the JE’s for unearned revenue?
1. When cash is received

2. When service is performed

Answer 2

When cash is received
Dr. Cash
Cr. Unearned Revenue

When service is performed and revenue is earned
Dr. Unearned Revenue
Cr. Revenue

Question 3

What is deferred expense? (Prepaid expense)

Answer 3

Cash is paid before the expense is incurred

Question 4

What are the JE’s for Prepaid expense?

1. When cash is paid
2. When expense is incurred

Answer 4

When cash is paid
Dr. Prepaid asset
Cr. Cash

When expense is incurred
Dr. expense
cr. Prepaid asset

Question 5

What is an accrued expense?

Answer 5

Cash moves last -
Cash is paid after the expense has been incurred

Incurred but not paid

Question 6

What is accrued revenue?

Answer 6

Cash moves last -

Cash is received after revenue is earned

Question 7

What is the journal entry for accrued expense

Answer 7

Dr. accrued expense

Cr. accrued payable

Question 8

What is the journal entry for accrued revenue

Answer 8

Dr. AR

Cr. Revenue