Category: Financial Accounting Review

Q37. Accounts receivable Entity A decided to write off $6,000 in accounts receivable that became uncollectible. Entity A uses the allowance method for bad debts

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CASH AND CASH EQUIVALENTS 1. Bank reconciliation: Adjustments from bank balance: Deposits in transit, outstanding checks. Adjustments from book balance: Deposits not recorded, not sufficient

Adjusting entries are prepared to adjust account balances from cash basis to accrual basis. © AccountingInfo.com

Accruals Accrued revenues and expenses are recognized before cash is received or paid. Under accrual basis accounting, revenues are recognized when they are earned even

CASH BASIS ACCOUNTING Under cash basis accounting, revenues are recognized when cash is received and expenses are recognized when cash is paid. ACCRUAL BASIS ACCOUNTING