Financial Accounting 101: Accruals and Deferrals - Accrual Accounting - Made Easy
Автор: MV Learning Systems
Загружено: 2020-04-15
Просмотров: 101025
This is the lesson that helped me to understand deferrals and accruals. Think of Deferrals as ‘Dollars before Action’ and Accruals as ‘Action before Dollars.’
Deferred Expense -- Asset: Prepaid Expense
Think of this as an expense where we paid Dollars before the Action of incurring the expense. Our vendors owe us, this is an asset.
Deferred Revenue -- Liability: Unearned Revenue
Think of this as revenues that we accepted Dollars before the Action of earning them. We owe our customers, this is a liability.
Accrued Expense -- Liability: Account Payable
Think of this as a time when the Action of incurring an expense came before the Dollars we need to pay. We owe our vendors money, this is a liability.
Accrued Revenues -- Asset: Account Receivable
Think of this as the Action of earning the revenues came before receiving the Dollars we need to collect. Our customers owe us money, this is an asset.
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