Financial Accounting 101: Accruals and Deferrals - Accrual Accounting - Made Easy
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4 سال پیش
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This is the lesson that
This is the lesson that helped me to understand deferrals and accruals. Think of Deferrals as ‘Dollars before Action’ and Accruals as ‘Action before Dollars.’
Deferred Expense -- Asset: Prepaid Expense
Think of this as an expense where we paid Dollars before the Action of incurring the expense. Our vendors owe us, this is an asset.
Deferred Revenue -- Liability: Unearned Revenue
Think of this as revenues that we accepted Dollars before the Action of earning them. We owe our customers, this is a liability.
Accrued Expense -- Liability: Account Payable
Think of this as a time when the Action of incurring an expense came before the Dollars we need to pay. We owe our vendors money, this is a liability.
Accrued Revenues -- Asset: Account Receivable
Think of this as the Action of earning the revenues came before receiving the Dollars we need to collect. Our customers owe us money, this is an asset.
Deferred Expense -- Asset: Prepaid Expense
Think of this as an expense where we paid Dollars before the Action of incurring the expense. Our vendors owe us, this is an asset.
Deferred Revenue -- Liability: Unearned Revenue
Think of this as revenues that we accepted Dollars before the Action of earning them. We owe our customers, this is a liability.
Accrued Expense -- Liability: Account Payable
Think of this as a time when the Action of incurring an expense came before the Dollars we need to pay. We owe our vendors money, this is a liability.
Accrued Revenues -- Asset: Account Receivable
Think of this as the Action of earning the revenues came before receiving the Dollars we need to collect. Our customers owe us money, this is an asset.
4 سال پیش
در تاریخ 1399/01/27 منتشر شده
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