Journal Entries Flashcards

Question

Journal Entry for Accured revenue Pg. 9-6 Def Journal Entry for Accured expense *Significance?

Answer 1

``` Revenue that is earned but not received Receivable: debit Revenue: credit (I/S) Then receive... Cash: debit Receivable: credit ``` ``` Expense that is incurred but has not been paid Expense: debit (I/S) Payable: credit Then pay... Payable: debit Cash: credit ``` *Income statement is "hit" at different times

Answer 2

``` Money that you received but have not earned Cash: debit Deferred Revenue: credit (liabitility) When you earn it... Deferred Revenue: debit Revenue: credit (I/S) ``` Something you paid but is not yet expensed Deferred Expense: debit (pre-paid) => (asset) Cash: credit Expense: debit (I/S) Deferred Expense: credit *Income statement is "hit" at different times

Answer 3

Insurance Expense: debit Prepaid insurance: debit Cash: credit

Answer 4

Royalty expense: debit Prepaid royalties: debit Accured royalties: credit Cash: credit

Answer 5

Cash surrender value: debit Life insurance: debit Cash: credit

Answer 6

Impairment loss: debit (I/S: income from continuing operations) Goodwill: credit

Answer 7

1) A/R: debit (B/S) Sales Revenue: credit (I/S) 2) Bad Debt expense: debit (I/S) Allowance for Doubtful accounts: credit (contra) *Difference is NRV

Answer 8

Bad Debt Expense: debit A/R: credit *Violates GAAP because it does not follow matching; bad debt expense not recorded at time of sale Also not Conservative because stated at FACE and not at NRV => it is overstated *Used for tax purposes

Answer 9

``` a) Bad debt expense: debit Allowance for doubtful: credit (B/S) b) Means that the company will not collect the money Allowance for doubtful: debit A/R: credit *No net effect on value when write off happens c) Customer decided to pay you back A/R: debit Allowance: credit Cash: debit A/R: credit ```

Answer 10

Cash: debit | Note payable: credit

Answer 11

Bad debt expense: debit | Allowance for impaired loan: credit

Answer 12

N/R: debit (company asset) Cash: credit (company lends out cash) Notes receivable: debit Discount on N/R: credit Asset: credit Gain on sale: credit

Answer 13

Cash: debit Loss on factoring: debit Allowance for bad debts: debit A/R: credit

Answer 14

Cash: debit Bonds Payable: credit Interest Expense: debit Cash: credit

Answer 15

Starts small then gets bigger Cash: debit Discount: debit Bonds payable: credit Interest Expense: debit (use market, effective, yield rate) Discount: credit Cash: credit

Answer 16

Starts big then gets small Cash: debit Premium: credit Bonds Payable: credit Interest expense: debit (use market, effective, yield rate) Premium: debit Cash: credit

Answer 17

3. Cash (% face + Accrued Interest - BIC) 4. BIC 5. Discount (plug) 1. Bond Payable (face) 2. Accrued Interest Payable (face x(stated rate) x (time - since last interest paid) 5. Premium (plug) *bonds payable net of discount or premium (NOT net of BIC)

Answer 18

When bond is called, retired or redeemed prior to maturity (opposite of issuing bonds) ``` Bonds payable: debit (face) Premium: debit (unamortized) Loss (plug): debit BIC: credit Discount: credit Cash: credit (amount to retire) Gain (plug): credit ```

Answer 19

Get rid of bond (retired) to get common stock ``` Bonds payable: debit (face) Premium: debit BIC: credit Common stock: credit (par value) Additional Paid-in capital: credit ``` ``` Bonds payable: debit (face) Premium: debit Loss: debit BIC: credit Common stock: credit (par value) Additional Paid-in capital: credit Gain: credit ``` *Not extraordinary because its not uncommon to convert bonds

Answer 20

Cash: debit Discount: debit Bond Payble: credit (par) APIC - Warrants: credit * Looks like a premium but isn't because 2 securities in 1; give value for both bond and warrant * Same as issuing a bond but with APIC

Answer 21

``` a) Leased asset: debit Leased Liability: credit b) Lease Liability: debit Cash: credit c) Leased Liability: debit Interest Expense: debit => use effective interest method to amortize Cash: credit ```

Answer 22

Gross investment in lease: debit (face) Sales Revenue: credit Unearned interest revenue: credit Cost of goods sold: debit Inventory: credit

Answer 23

Lease payment receivables: debit Equipment: credit Unearned interest revenue: credit

Answer 24

Cash: debit Equipment (asset): credit DEFERRED gain: credit ``` Depreciation Expense: debit Accumulated Depreciation: credit Deferred gain: debit Depreciation Expense: credit **reduces future expense ``` ``` Rent Expense: debit Cash: credit Deferred gain: debit Rent expense: credit **reduces future expense ```

Answer 25

a) Purchases: debit A/P: credit A/P: debit Cash: credit Discount: credit (lowers COGS) b) Purchases: debit A/P: credit A/P: debit Expense: debit Cash: credit

Answer 26

An expense that is incurred but not yet paid in cash ``` Expense: debit (I/S) Accured Liability (Salaries payable B/S): credit (current liability) ``` Accured Liability: debit Cash: credit

Answer 27

Expenses paid in cash, but not yet incurred (like asset) Prepaid Expense: debit (current asset) Cash: credit Expense: debit (I/S) Prepaid Expense: credit

Answer 28

Revenue collected but not yet earned Cash: debit Unearned Revenue: credit (B/S) (current liability) Unearned Revenue: debit Revenue: credit (I/S)

Answer 29

Revenue earned but not yet collected (asset) Receivable: debit Revenue: credit (I/S) Cash: debit Receivable: credit

Answer 30

a) Warranty expense: debit Estimated warranty liability: credit b) Estimated warranty liability: debit Cash: credit

Answer 31

Pension Expense: debit | Cash: credit

Answer 32

Cash: debit Common Stock: credit APIC - common stock: credit

Answer 33

Cash: debit Common stock: credit (par) B/S APIC - common stock: credit B/S *Repurchase Treasury stock: debit (contra equity) => reduction of total equity outstanding VERY IMPORTANT Cash: credit Cost in, cost out!!! *Resell Cash: debit APIC - treasury stock: debit

Answer 34

Treasury stock cost is a debit account even though it is from an equity account (supposed to be credit); therefore, it is considered a contra equity account

Answer 35

a) The board of directors commits to the dividend Retained earnings: debit Dividend payable: credit b) The shareholders at this date are identified as the ones entitled to the dividend No Journal Entry c) Distribution is made to the shareholders of record Dividends Payble: debit Cash: credit

Answer 36

``` a) X1: Expense: debit Prepaid Expense: debit Cash: credit X2: Expense: debit Prepaid: credit ``` b) X1: Expense: debit Cash: credit X2: Already expensed all out, therefore it is 0

Answer 37

Income tax refund receivable: debit Deferred tax asset: debit Income tax benefit: credit (I/S)

Answer 38

Cash: debit A/R: debit Sales revenue: credit (I/S) COGS: debit (I/S) Inventory: credit *Unrealized Gross Profit: debit Deferred Gross Profit: credit

Answer 39

a) Construction Receivable: debit Billings: credit (current liability) b) Construction Receivable: debit Billings: credit (current liability)

Answer 40

a) Cash: debit Construction Receivable: credit b) Construction Receivable: debit Billings: credit (current liability)

Answer 41

a) Construction in Progress (CIP): debit Cash: credit b) Construction Receivable: debit Billings: credit (current liability)

Answer 42

a) NONE, no income until its done b) CIP: debit Gross profit on CIP (I/S): credit

Answer 43

*Getting out of general fund Other financial uses: debit Cash: credit *Get into debt service fund Cash: debit Other financial sources: credit

Answer 44

*Capital fund pays Expenditures - utilities: debit Cash: credit *Enterprise fund receives Cash: debit Revenues: credit

Answer 45

*General fund spent money Expenditure - conference: debit Cash: credit *General gets money back Cash: debit Expenditure: credit *The fund that pays for it (modified acrrual) Expenditure: debit Cash: credit *The fund that pays for it (acrrual) Expense: debit Cash: credit

Answer 46

*Fund lending out the money Due from special revenue fund: debit Cash: credit *Fund that receives the moeny Cash: debit Due to enterprise fund: credit

Answer 47

Estimated Revenue: debit Estimated other financing sources: debit (bonds & transfer in) Budgetary Fund Balance - unreserved: credit (plug) Appropriations: credit (authorize to spend on budget) Estimated other financing uses: credit (spent)

Answer 48

``` *Assess Property Tax Property Tax Receivable: debit Allowance for Uncollectibles: credit (dont think gonna get) Revenues: credit (net) Deferred Revenue: credit ``` ``` *a) Collect property tax Cash: debit Tax Receivable: credit b) Over-collection of property taxes Allowance for uncollectibles: debit Revenues: credit c) Write off Property Tax receivables Allowance for uncollectibles: debit Taxes Receivable: credit ```

Answer 49

a) No journal entry because cannot accrue => only journal entry when received b) Cash: debit Revenues: credit

Answer 50

``` a) Encumbrances: debit Reserved for Encumbrances: credit b) Reserved for Encubrances: debit Encumbrances: credit c) Expenditures: debit Vouchers Payable: credit d) Vouchers payable: debit Cash: credit ```

Answer 51

``` a) Flip set-up budget Appropriations: debit Estimated Other Financing Use: debit Budgetary Fund Balance - Unreserved: debit Estimated Revenue: credit Estimated Other financing source: credit b) Revenues: debit Fund Balance - unreserved: debit Other financing sources: debit Expenditures: credit Encumbrances: credit Other financing uses: credit ```

Answer 52

``` a) Cash: debit (operating cash inflow) Revenues (Unrestricted net asset): credit b) Cash: debit (operating cash inflow) Revenues (Temporary restricted net asset): credit c) Have to convert from temporarily restricted net asset to unrestricted net asset Net assets released (TRNA): debit Net assets released (UNA): credit Expenses (UNA): debit Cash: credit d) Cash: debit (financing cash inflow) Revenue (PRNA): credit ``` *Has no net effect on unrestricted net assets

Answer 53

``` *Recognize expense and revenue that was donated because its a service that you would normally pay Expense (UNA): debit Contribution Revenue (UNA): credit ```

Answer 54

``` *An unconditional promise to give Pledges receivable: debit (PV) Allowance for uncollectible pledges: credit Revenues (UNA): credit Revenues (TRNA): credit ``` Net asset released (TRNA): debit Net asset released (UNA): credit

Answer 55

Cash: debit Contribution Revenue: credit Cash: debit Refundable advance: credit (liability)

Answer 56

Cash: debit Scholarship expense: debit Tuition remission: debit Tuition revenue: credit * Considered revenues * NOT revenue

Answer 57

Investment: debit Cash: credit ``` *Close out everything from ACQUIREE => because consolidation will go ACQUIRER's books C/S: debit APIC: debit R/E: debit Equipment: debit (write up to FMV) Goodwill: debit Investment: credit Gain: credit business combination that are not individually identified and separately recognized ``` *Same as above but add: Noncontrolling interest: credit

Answer 58

``` a) Cash or A/R: debit => problem b/c cant owe yourself Accumulated Depreciation: debit PP&E: credit *GAIN: credit => problem because it will be a gain to yourself b) PP&E: debit Cash or A/P: credit => problem b/c cant owe yourself c) Gain: debit PP&E: debit Accumulated Depreciation: credit Also: A/P: debit A/R: credit d) Overdepreciate by gain (Flip depreciation expense) Accumulated Depreciation: debit Depreciation Expense: credit ```

Answer 59

``` a) Cash: debit Bonds Payable: credit b) Investment: debit Cash: credit Discount: credit => really a gain to yourself so fix c) Eliminate the bond Bonds payable: debit Investment in bonds: credit Gain on retirement: credit => only in worksheet ```

Answer 60

``` a) Cash: debit Sales revenue: credit COGS: debit Inventory: credit b) Inventory: debit => gives you % profit in ending Cash: credit c) Cash: debit Sales revenue: credit COGS: debit Inventory: credit d) Sales revenue: debit Inventory: credit (% profit in ending) COGS: credit ```

Answer 61

Net Income: debit | Retained Earnings: credit

Answer 62

Bond payable: debit Discount: debit C/S: credit APIC: credit

Answer 63

Expense: debit Accrued liability: credit *Accrued liability: debit Cash: credit

Answer 64

Prepaid Expense: debit Cash: credit Expense: debit Prepaid Expense: credit

Answer 65

Cash: debit Unearned Revenue: credit *Unearned revenue: debit Revenue: credit (I/S)