Adjusting Journal Entries (Prepayment type)
ฝัง
- เผยแพร่เมื่อ 5 ก.ย. 2024
- This video discusses the prepayment type of adjusting journal entries and illustrates the concept with multiple examples.
-
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
-
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
* eepurl.com/dIaa5z
-
SUPPORT EDSPIRA ON PATREON
* / prof_mclaughlin
-
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
* edspira.thinki...
-
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: podcasts.apple...
* Spotify: open.spotify.c...
* Website: www.edspira.co...
-
GET TAX TIPS ON TIKTOK
* / prof_mclaughlin
-
ACCESS INDEX OF VIDEOS
* www.edspira.co...
-
CONNECT WITH EDSPIRA
* Facebook: / edspira
* Instagram: / edspiradotcom
* LinkedIn: / edspira
-
CONNECT WITH MICHAEL
* Twitter: / prof_mclaughlin
* LinkedIn: / prof-michael-mclaughlin
-
ABOUT EDSPIRA AND ITS CREATOR
* www.edspira.co...
* michaelmclaugh...
I don't know what I'd do without these videos! You said paying off an asset is called an expense and seriously that made everything piece together. You think my teacher would have mentioned that!
Don’t know what I’d do without these videos. Super insightful!
OMG WHY doesnt my Professor just say it like you!!!!!!!!!!!!!!!!!!!!!!!! why am i just finding these videos out nowww
thank you very much, i appreciate all of this.
I watch your videos in my free time in addition to my CPA review material. They help clarify anything I might have misses along the way. Thanks!
Thank you SO much for your easy to understand, straight forward videos. You've saved me some huge headaches!!🙏
Happy to help!
School just came back from a 5 week strike and my accounting midterm is today. These videos are saving my ass, thank you!
The best teacher as always
Thanks Robert!
omg. I was struggling with my accounting class and you save my life. Thank you!
Very Simple way & excellent class.....
Are you a wizard, like oh my gosh, your amazing! Thank you for your videos!
CLEAR EXPLANATION!! THANK YOU VERY MUCH!
very helpful! thank you sir! you saved me from a lot of headache
THANK YOU SO MUCH. US STUDENTS LOVE YOU.
THANK YOU!
Thank you for the accounting videos!!!!
Good material
Unearned Revenue=Accounts Receivable --> Unearned Revenue is considered an asset --> Increases with debit and decreases with credit --> 240 should be on the left and 30 on the right?
Unearned Revenue is a liability, which would increase with a credit. It is not the same as accounts receivable, which is an asset. Here's a video on unearned revenues: th-cam.com/video/O9Yp8Uv93to/w-d-xo.html
Thanks!
super helpful!!! thank you so much!
thank you man
Hence Edspira, I guess the more elaborate equation will be : Asset = Liab + {Owner's Capital - Withdrawal + Revenue - Expense}
And this expression {Owner's Capital - Withdrawal + Revenue - Expense} = Owner's Equity, am I correct ?
Diptanil,
It looks like you are breaking-out the individual components of stockholders equity. You are correct in your equation. Typically it isn't written this way because it isn't all-inclusive. Some companies use different accounts and simply stating "stockholders equity" simplifies the equation. I like the way you are thinking, and great question!
You have a different way to make accounting is easy .
Can it be A/P instead of cash?
Thank u so much
Does insurance expense affect equity or the income statement? Thanks!
expenses reduce net income (on the income statement) and stockholders' equity (on the balance sheet). The income statement and balance sheet are connected, because expenses reduce net income (income statement) and net income affects retained earnings (balance sheet)
@3:47 When we use some of our assets, it decreases. So shouldn't Insurance Expense or any other expense be considered as a credit? Thanks.
+minkirax Insurance Expense is an account that decreases the equity. Prepaid Insurance should be the one that is directly credited as time period passes.
Assets are a debit as per the accounting equation whilst Insurance Expense is a P&L entry which as it is an expense would also be a debit.
With regards to prepayment I think of it like this: Invoice goes on for a full 12 months £1200 so this is a Debit in the P&L. We come along and say that should only be one month so we take out 11 months as part of our adjusting entries so Credit Insurance P&L and Debit prepayments, an asset, 11 months or £100. A lot of examples presume when the invoice is posted it goes to Prepaid insurance but in the real world the default on the account will be P&L insurance and it is up to you as part of your month end check to adjust.
UH here is a problem im pretty sure prepayment type is supposed to be called DEFERRAL type of journal entries,
man this confused me so much on a test. i guessed it afterwards that this must have supposed to have been the deffereal but im pretty sure you are not useing the universal term of defferal
Please let me know how to make JE for that $210 unearned revenue.
Thanks so much
You would debit unearned revenue and credit revenue of $10 each month (or $30 per quarter) with an adjusting journal entry until the 2 year subscription is completed, and your unearned revenue is $0. We do this to match the revenue with the period in which it is earned. Thanks for watching!
2021 UPDATE: The "unearned revenue" is now "deferred revenue". Y.A.Y.
I wish i was paying you instead, thanks sr (y)