Chapter 13: Adjustments Flashcards
(19 cards)
Bad debt
Specific debtors that are written off, as proof exists that the debtors in all probability will not be able to pay their debts.
Accounting Entry:
Bad Debt written off
Dt - Bad Debts
Cr - Debtors
Two different types of bad debts recouped/recovered:
- Written off in the current year and collected in the same year.
- Written off in the previous year and collected in the current year.
Accounting Entry:
Collection of bad debt written off in the same year
Dt - Bank
Cr - Bad Debts
Accounting Entry:
Collection of bad debt written off in a previous year
Dt - Bank
Cr - Bad debt recouped
Accrued expense
An expense that is applicable to a specific financial period, but has not been paid at year-end.
Accounting Entry:
Accrued Expense
Dt - Expense
Cr - Accrued Expense
Accounting Entry:
Accrued expense paid
Dt - Accrued expense
Cr - Bank
Prepaid expense
An expense that is paid in the current financial period, but is applicable to a future financial period.
Accounting Entry:
Prepaid expense
Dt - Prepaid expense
Cr - Expense
Accounting Entry:
Prepaid expense written back
Dt - Expense
Cr - Prepaid expense
Income receivable
An income applicable to a specific financial but one that has not been received at year-end.
Accounting Entry:
Income receivable
Dt - Income receivable
Cr - Income
Accounting Entry:
Income receivable received
Dt - Income
Cr - Income receivable
Income received in advance
Income received in the current financial period, but is applicable to a future financial period.
Accounting Entry:
Income received in advance
Dt - Income
Cr - Income received in advance
Accounting Entry:
Income received in advance written back
Dt - Income received in advance
Dt - Income
Accounting Entry:
Consumable inventory on hand
Dt - Consumable inventory
Cr - Expense
Accounting Entry:
Consumable inventory written back
Dt - Expense
Cr - Consumable inventory
