Accrued Revenue
What GAAPS does accrued revenue affect?
Revenue recognition
Do you debit or credit unearned revenue in initial entry?
Credit
Is prepaid expense debited or credited?
Debit
What is an accrued expense?
An expense that has been incurred but not yet paid or recorded.
What is accured revenue?
Revenue that has been earned but has not yet been collected in cash
Which GAAP does unearned revenue follow?
Revenue recognition
What is a prepaid expense?
A payment made in advance for goods or services to be received in the future.
When do you record an accrued expense?
When the expense is incurred, not when it's paid.
Which 2 accounts are affected when accrued revenue is recorded?
Accounts receivable - Debit
Revenue - Credit
What does unearned revenue appear as on the balance sheet?
Current liabilities
When recording prepaid rent, which account is debited?
Prepaid rent
What is an accrued expense?
An expense that has been incurred but not yet paid or recorded.
When do you know to record accrued revenue?
Record when you have earned the money even if you have not received it
Why is unearned revenue a liability?
Because the company still owes the customer good/service.
What type of account is prepaid expense when first recorded?
Asset
Which accounting principle is used when recording accrued expense?
The matching principle