Journal entries Flashcards
The allowance entry
Establishing the allowance and the credit losses (Ch6)
DR Credit Losses
CR Allowance for Expected Credit Losses
OR
DR Bad debts expense
CR Allowance for Uncollectible Accounts or Allowance for Doubtful Accounts (AFDA)
The write off entry
Writing off a specific account after we have given up on the chance that they are going to pay (Ch6)
DR Allowance for Expected Credit Losses
CR A/R
OR
Allowance for Uncollectible Accounts
OR
Allowance for Doubtful Accounts (AFDA)
The recovery entry
Somebody who you have given up on, paid off their debt with you
2 entries (Ch6)
DR A/R
CR AFDA
AND
DR Cash
CR A/R
Journal Entry for a Credit card transaction with a related fee (Ch 6 )
Let’s look at an example of how a company would record a credit card transaction, including the related fee. If a company made a $3,500 credit card sale, and the credit card discount was 3%, the journal entry would be as follows:
DR A/R—Credit Card Company 3,395
DR Credit Card Expense 105
CR Sales Revenue 3,500
Journal Entry for Direct Write off Method
DR Credit Losses
CR A/R
Journal entry for when the inventory is purchased periodic inventory system
DR Inventory
CR Cash or A/R
Journal entry for when the inventory is purchased perpetual inventory system
DR Purchases
CR Cash or A/R
Journal entry at the time of sale periodic inventory system
DR Cash or A/R
CR Sales Revenue
DR COGS
CR Inventory
Journal entry at the time of sale perpetual inventory system
DR Cash or A/R
CR Sales Revenue
Additional closing entry for perpetual inventory system
DR Inventory (Closing)
DR COGS
CR Purchases
CR Inventory (Opening)
Depreciation Journal Entry
DR Depreciation expense
CR Accumulated depreciation, Equipment
Impairment Loss entry
DR Loss on impairment
CR Acc. impairment loss, Equipment
gain on disposal journal entry
Cash 6,000
Acc. Depreciation, Equipment 45,000
Equipment 50,000
Gain on Disposal of Equipment 1,000
gain or loss on equipment journal entry
DR Cash A
DR Acc. Depreciation, Equipment B
CR Equipment C
Gain or Loss on Disposal of Equipment D
A + B = C + D
Scrapped asset journal entry
Acc. Dep. Equip. 45000
Loss on Disposal of Equip. 5000
Equipment 50000
Amortization journal entry
DR Amortization expense XXX
CR Acc. Amortization, Patents XXX
Journal entry for current portion of a long term debt
(how to move it to current portion - reclassification entry)
DR Long Term Loan Payable
CR Current portion of long term payable
Deferred Revenue Journal Entry
DR Cash
CR Deferred Revenue
after earning the revenue journal entry (gym membership example)
DR Deferred Revenue
CR Membership Revenue
Initial purchase of gift card journal entry
DR Cash
CR Deferred revenue (or gift card liability)
Usage of gift card (redemption)
DR Deferred revenue (or gift card liability)
CR Sales Revenue
DR COGS
CR Inventory
The journal entry for warranty provision for assurance type of warranty
DR Warranty expense
CR Warranty Provision
Journal entry for assurance type of warranty
Warranty Provision
XXX
Inventory
XXX ⟶ If product replaced
or
Inventory and/or Wage Expense
XXX ⟶ If product repaired
or
Cash
XXX ⟶ If refund provided*
or
Deferred Revenue
XXX ⟶ If store credit provided
or
Miscellaneous Revenue
XXX ⟶ If warranty period expired
*This assumes that the product returned cannot be sold to another customer.
Employee Entry
DR Wage expense XXX
CR Employee Income Taxes payable XXX
CR CPP Payable XXX
CR EI Payable XXX
CR Wages payable (or cash if paid at this time). XXX
Employer Entry
This entry accounts for the employer’s share of CPP and EI
DR Wages expense XXX
CR CPP (same as the employee’s share) XXX
CR EI (1.4 times the employee’s share) XXX
payment of wages entry
DR Wages payable XXX
CR Cash XXX
Remittance Entry
DR Employee Income Taxes Payable XXX
DR CPP (both the employee’s and employer’s shares) XXX
DR EI (both the employee’s and employer’s shares) XXX
CR Cash XXX
Journal entry for declaring dividends
DR Dividends Declared XXX
CR Dividends Payable XXX
