Trial Balance Flashcards
1
Q
Types of Adjusting Entries
A
PREPAYMENTS
1. Prepaid Expenses - Expenses paid in cash and recorded as assets (or expenses) before they are used or consumed.
2. Unearned Revenues - Revenues received in cash and recorded as liabilities (or revenues) before they are earned
ACCRUALS
1. Accrued Expenses - Expenses incurred but not yet paid in cash or recorded.
2. Accrued Revenues - Revenues earned but not yet received in cash or recorded.
ESTIMATES
1. Amortization - Allocation of the cost of capital assets to expense over their useful lives.
