Flashcards in Adjusting Journal Entries Deck (5):
At the end of year 2, a major customer filed for bankruptcy.
DR: Operating expenses
CR: Allowance for doubtful accounts
In the last week of year 2, the company recorded revenue for services rendered to some clients in year 3.
CR: Accounts Receivables
Employee overtime pay for hours worked before year-end, but paid in the following year, were not recorded in year 2.
DR: Operating Expense
CR: Accrued Liabilities
During year 2, a former client sued the company for inappropriate work. Legal counsel has advised that it is "reasonably possible" that the company will be assessed damages. An amount can be estimated.
Disclosure but No Entry