help with homework

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Hello everyone, I am a student and I am learning the basic concepts of financial accounting. My professor has given a project work where I am suppose to create financial statements for a fake cafe. (Cafe started on 1st July 2014, and I am suppose to create the financial statements for the month of July (31st July 2014))

After making all the journal entries based on the information given, i have trouble creating the "adjusted trial balance" , as in which entries should be under the unadjusted trial balance section, and which entries should be under the adjustments section

For example,

1. 31st Jul Dr Rent Expense $1000
Cr Prepaid Rent $1000
To record rent expense

This will fall under the Adjustments section right? Since it is a form of deferral.


2. "Background information : For corporate events, the cafe bill the companies after the event. So on 30th July, there was one corporate event for "Wellington Tours" amounting to $500"

So based on that, I recorded this,

30 Jul Dr Accounts Receivable $500
Cr Sales Revenue $500
Sales (Corporate event)

My question is should this transaction go to the Unadjusted trail balance section or go to the Adjustments section

3. If the question was to change to " on 31st July, there was one corporate event for "Wellington Tours" amounting to $500" , will this go under the the adjustments section or unadjusted trail balance section?

___________________________________________________________________________


Generic questions

4. I have difficulty understanding the concept of "adjusting for accrued revenues"

a) Lets say I need to provide adjusting entry for 31st May

On 17th May, I perform a service on account for a client for $800.

17th May Dr Accounts Receivable $800
Cr Service Revenue $800

On 22th May client paid back full amount

22th Ma Dr Cash $800
Cr Accounts Receivable $800

For the transaction on 17th May, is it considered an adjusting entry or just a normal journal entry? Will it fall under the Unadjusted trail balance section?

b) Let say I need to provide adjusting entry for 31st May

On 17th May, I perform a service on account for a client for $800

17th May Dr Accounts Receivable $800
Cr Service Revenue $800

Client promises to pay back on 5th June.

So for this transaction, is it considered an adjusting entry or just a normal journal entry? Will it fall under the unadjusted trail balance section or the adjustment section?


c) Let say I need to provide adjusting entry for 31st May

On 31st May, I perform a service on account for a client for $800

31st May Dr Accounts Receivable $800
Cr Service Revenue $800

So for this transaction, is it considered an adjusting entry or just a normal journal entry? Will it fall under the unadjusted trail balance section or the adjustment section?



Thanks for the help everyone, I know this is a lengthy post :eek:
 

kirby

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Usually, a problem set gives the "usual" transactions in a group then, in a separate set of statements, gives the "adjusting" transactions in another group. That way you can distinguish one from the other. If your teacher has mixed these all together then that's bad teaching, in my opinion, especially for beginning accounting.

Anyway..
The transactions that post into the unadjusted trial balance typically come from the standard journals: Disbursements (checks issued -CR to cash ), cash receipts (DR to cash), sales (record your sales as DR to accts receivable and CR to Revenue) and payables (CR to Accounts Payable).
Given that, the stuff recorded thru the general journal is in your adjusted column. That usually includes: correction of errors, adjustment of prepaids, accrual of revenue or expense for anything that did not get in through the other journals.

so use the above to form an answer to your questions and post those answers. Then I or someone else will let you know if you got it right. OK?
 
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