Chapter 3 Appendix Alternative Treatment of Prepaid Expenses and Unearned Revenues E 3A-1 Req. 1 (Supplies recorded initially as an asset; CP = cash payment; Adj. = Adjustment) Supplies Supplies expense Beg Bal 1,100 Adj 5,400 Adj 5,400 CP 5,000 Bal 5,400 Bal 700 Req. 2 (Supplies recorded initially as an expense) Supplies Supplies expense Adj 700 Beg Bal 1,100 Adj 700 Bal 700 CP 5,000 Bal 5,400 Req. 3 Account balances are the same under both approaches. E 3A-2 Req. 1 (Unearned revenue recorded initially as a liability) Journal entries: Journal POST. DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT
Chapter 3 Appendix Alternative Treatment of Prepaid Expenses and Unearned Revenues E 3A-1 Req. 1 (Supplies recorded initially as an asset; CP = cash payment; Adj. = Adjustment) Supplies Supplies expense Beg Bal 1,100 Adj 5,400 Adj 5,400 CP 5,000 Bal 5,400 Bal 700 Req. 2 (Supplies recorded initially as an expense) Supplies Supplies expense Adj 700 Beg Bal 1,100 Adj 700 Bal 700 CP 5,000 Bal 5,400 Req. 3 Account balances are the same under both approaches. E 3A-2 Req. 1 (Unearned revenue recorded initially as a liability) Journal entries: Journal DATE ACCOUNTS AND EXPLANATIONS POST. REF. DEBIT CREDIT
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