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Accrued Revenues
Accrued revenues are revenues that the business has earned by providing goods and services, but has not yet collected the payment.
- When revenues have been earned but not collected:
- Increase revenue account by the amount earned
- Increase receivable account by the amount earned Example: Accounts receivable, Rent receivable, Interest receivable
Common Accrued Revenues
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Example: Accrued Revenues
Prepare the following adjusting journal entries.
- On November 1st, 2019 ABC Inc signed a service agreement with a new customer. The company will provide the service at a cost of $2,000 per month and will be paid in full upon completion of the contract.
- Sales totalling $4,000 had not been recorded in the company's books at the end of the year.
Practice: Accrued Revenues
Prepare the adjusting journal entries required in each of the following independent scenarios. In all cases the fiscal year ends December 31, 2020.
Allstate Insurance provided a client with insurance coverage for the months of November and December for which they have not yet been paid. The client's insurance premiums are $200 per month.
Transactions:
| Account | Debit | Credit |
|---|---|---|