HINT Activity 3.a - Identifying adjustments as Deferrals Prepaids or Accrual Lab

Question

HINT Activity 3.a - Identifying adjustments as Deferrals Prepaids or Accrual Label the adjustments as either Deferrals / Prepaids or Accrual AND as a revenue or expense. View drag and drop keyboard instructions Deferrals / Prepaids Prepaid Expense Accrual Unearned Revenue Accrued Revenue Accrued Expense Work performed but not yet billed to customer, $500 Received $3,100 from customer for six month service contract. Purchased $2,600 of office supplies on account. Prepaid Expense Deferrals/ Prepaids Deferrals/. Prepaids Accrual Unearned Revenue Accrual Deferrals/ Prepaids Drag card here Drag card here Drag card here

Explanation / Answer

Accrual and Revenue (On Accrual Concept Income will be recognised as and when accured to the Business)

Unearned Revenue (Advance received for the contract to be recognised as Liability under Advance received from Customers and receognised as Income once it is performed)

Deferrals (Office Supplies are kept in Inventories if accounting policy permits and deferred for accounting as Expense as and when issued for Use. Hence, treated as Deferred Expenditure)

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