A:
no adjusting entry will be passed because advance payment is for three months sep oct and nob. advance payment is adjust before Dec.
B:
unearned revenue account..............Dr
revenue earned..............Cr
Explanation:
adjusting entry will be pass because advance payment is for three months of dec(2009) and jan feb 2010. so it is necessary to pass adjusting entry of one month of dec.
EFFECT OF ENTRY.
this entry reduced the liabilities and increase the revenue not only this it also increase the owner's capital
C:
account receivable...........Dr
revenue earned..............Cr
Explanation:
adjusting entry will be pass to records the revenue which we earned.because we give services to our customers .there for it is very necessary to record those services which we perform.
EFFECT OF ENTRY.
this entry increase our asset revenue as will as increase owner's equity.
D:
no adjusting entry is required because benefit of this insurance police will start in next accounting period which is start on 2 Jan.
E:
depreciation expense .............Dr
accumulative depreciation expense..............Cr
EXPLANATION:
entry will be pass because the values of fixed asset is decrease with passage of time.
EFFECT OF ENTRY:
this entry increase the expense and reduced the revenue thus owner equity also reduced.
F:
Salary expense .............Dr
Salary payable.................Cr
Explanation:
entry will record because this expense is Dec.and expense is always record same accounting period .
EFFECT OF ENTRY:
this entry increase our expense.and liabilities. and reduced revenue and equity.
