Deferrals & Accruals | Deferred Revenue, Deferred Expense, Accrued Revenue & Accrued Expense

This video discusses four types of adjusting entries:

-Deferred revenue adjusting entries are used to recognize revenue that has been earned but not yet received in cash.
-Deferred expense adjusting entries are used to recognize expenses that have been incurred but not yet paid in cash.
-Accrued revenue adjusting entries are used to recognize revenue that has been earned but not yet received in cash.
-Accrued expense adjusting entries are used to recognize expenses that have been incurred but not yet paid in cash.

The video provides examples of each type of adjusting entry and explains how to make the entry.

The video also discusses the importance of adjusting entries in ensuring that financial statements are accurate. Adjusting entries are necessary to match revenues and expenses to the correct accounting period. This helps to ensure that the financial statements accurately reflect the company's financial performance.

Some basic knowledge of Journal Entries (Debit & Credit) will help you follow and understand this video better!

00:00 Revenue & Expenses - Journal Entry
01:44 Deferred Revenue & Deferred Expense
09:04 Accrued Revenue & Accrued Expense