Adjusting Journal Entries (Accrual Type)

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@tarabest4160 5 жыл бұрын

Accruals never involve a debit or credit to cash. Otherwise it is not a an accrual. A proper accrual of revenue is one that has been earned but for which cash has not yet been received. So, in most revenue accruals, a receivable is debited and then the revenue account is credited.

@endurogod-r1e 3 жыл бұрын

Thanks for these videos, it helps me so much with understanding financial accounting in university

@sunnythacreator 8 жыл бұрын

Sweet, short, and to the point! Thank you!

@Edspira 8 жыл бұрын

No problem! Best wishes

@Chris-fe1kx 6 жыл бұрын

Thank you so much! Explained better than my teacher.

@addesom 8 жыл бұрын

thanks from east africa Somalia

@Edspira 8 жыл бұрын

Greetings my friend!

@LorenzoMarkovian 9 жыл бұрын

Thanks for the excellent channel. Amazing and inspiring website as well. Regards from Canada.

@chenlianhe5370 8 жыл бұрын

I love your videos about accounting subject，which makes sense to me！

@mrturnables1 6 жыл бұрын

Which makes sense? your love for the videos or the videos??

@gastonwalpole86 10 жыл бұрын

thank you for that, that was an easy and simple explination

@Edspira 10 жыл бұрын

No problem! Good luck with your accounting studies :)

@komalthakur4470 8 жыл бұрын

+Education Unlocked please explain cash flow tuesday wil be my final exam of accounting

@TheFedericohiguain2 6 жыл бұрын

Awesome video, very clear explanation. Thanks!

@Edspira 6 жыл бұрын

Happy to help!

@MyFinancialFocus 2 жыл бұрын

Once the invoice is sent, the accrued revenue becomes accounts receivable.

@rumel911 9 жыл бұрын

That was very helpful! Thank you

@stephanielopez819 8 жыл бұрын

wow! makes a lot of sense thank you education unlock

@wouterverstraeten8444 8 жыл бұрын

I learned that you can never put the cash account in the adjusting entry? is this true or not?

@imcintyre01 5 жыл бұрын

This is true this is very true. You *cannot* use cash in adjusting entries. Each college level accounting teacher I have had has made that very clear, going so far as saying if you do, you should probably drop being an accountant then and there if you do.

@taylorwilliams10 5 жыл бұрын

I thought adjusting entries did not involve the cash account

@sdiptanil 7 жыл бұрын

Edsipra, generally when the wages are paid on weekly basis, is it true that the payment is made for the whole week ? If yes, then on Friday won't they get the wages for the whole five days & not till WEDNESDAY ? But then, I am questioning myself how the journal entries would be for the payment of January 1st & January 2nd. Could you kindly explain ?

@Edspira 7 жыл бұрын

Diptanil, On Friday they would be paid for the entire week ($1167). In this example, on 12/31 the company needs to record an expense for wages payable since employees earned wages in 2016, however, the cash won't be paid to them until 2017. Here's what the journal entries would look like: (Record the Wages Expenses in 2016) 12/31/16 DR Wages Expense $700.00 CR Wages Payable $700.00 (Record the Payment to Employees in 2017) 1/2/17 DR Wages Expense $467.00 DR Wages Payable $700.00 CR Cash $1167.00

@sdiptanil 7 жыл бұрын

Amazing Reply Edspira ! Highly Appreciated

@bryanche1693 7 жыл бұрын

I am not really understand why the wages expense is a debit? Doesn't it should be a credit, as wages expense means you pay your workers, which means a decrease in cash(asset). Can you explain please.

@Edspira 7 жыл бұрын

Expenses are temporary accounts that are closed out to retained earnings. So, if you think about the accounting equation (Assets = Liabilities + Stockholders Equity), expenses will reduce retained earnings, which in turn will decrease stockholders equity. Expenses are not assets. For the temporary accounts, expenses increase with a debit and revenues increase with a credit. In this example, on 12/31 the company needs to record an expense for wages payable since employees earned wages in 2016, however, the cash won't be paid to them until 2017. Here's what the journal entries would look like: (Record the Wages Expenses in 2016) 12/31/16 DR Wages Expense $700.00 CR Wages Payable $700.00 (Record the Payment to Employees in 2017) 1/2/17 DR Wages Payable $700.00 CR Cash $700 Wages Payable is a liability that will have a $0 balance after the employees are paid. Cash is an asset that will decrease with a credit. For more information on expenses: edspira.com/topic/expenses For more information on closing temporary accounts to retained earnings: edspira.com/topic/closing-entries

@user-jq3ek9jr2u 6 жыл бұрын

Actually, when you pay your workers, you put that amount of money as minus in cash (credit) AND increase in expense (debit), that's because debit has to equal credit. In this video, you didn't actually lost any cash yet, but have actually make expense, so they put the wages in debit.