Revenues - Balance Day Adjustments

Question 1

Accrued revenues

Answer 1

Revenues that have been earned but not yet received

Question 2

Prepaid revenues

Answer 2

Revenues received but not yet earned

Question 3

Need for balance day adjustments

Answer 3

• compare all revenues earned with expenses incurred in the current Reporting Period.
• these adjustments are necessary in order to update these revenues / expenses in order to calculate an accurate net profit