Canada Financial Acccounting Assignment Help?

[Trish]

Hello Community,

I'm wondering if anyone can help out with a couple of questions that are dogging me for a financial accounting assignment (1st. year Univ.).

1 - When reclassifying long term debt to the current portion of long term debt in the journal, is it an adjusting entry done at the end of the accounting period for current portion of long term debt due in the next year? Also, would this transaction mean that you debit long term debt and credit current portion of long term debt?


2 - If unearned revenue is often considered a current liability, am I to assume that unearned revenue in the previous year's balance sheet will always be adjusted in the current year if it is stated generally that revenue was earned in the current period.

Any help you can offer me on these topics would be greatly appreciated.

Thanks, Trish

 

[kirby]

1. Yes. Yes.
2. Yes, if they give you a balance sheet that is classified into short term (current) and long term liabilities and then tell you that you HAD short term (current liabilities) unearned income in the amount of $x last year and what happened to it a year later THEN it by now must have been recorded into income (cause as a SHORT TERM liability it is estimated to go into income within a year. Watch out if the balance sheet is NOT classified into long and short term because unearned income MIGHT be earned in MORE than a year.

 

[Trish]

Thanks so much Kirby....I was on the right track! I had done two versions of the assignment but now I'm definitely going with one over the other. Thanks again, Trish