Hartmann Co. provided $42,000 worth of maintenance services to a customer, Simmons Co., the last week of December 2020. Hartmann did not invoice the customer until January 3, 2021. What adjusting entry must Simmons make at December 31, 2020? No entry needed on December 31, 2020 Debit: Accounts Receivable, $42,000; Credit: Revenue, $42,000 Debit: Maintenance Expense, $42,000; Credit: Accounts Payable, $42,000 Debit: Accounts Payable, $42,000; Credit: Maintenance Expense, $42,000 Debit: Revenue, $42,000; Credit: Accounts Receivable, $42,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Hartmann Co. provided $42,000 worth of maintenance services to a customer, Simmons Co., the last week of December 2020. Hartmann did not invoice the customer until January 3, 2021. What
adjusting entry must Simmons make at December 31, 2020?No entry needed on December 31, 2020
Debit: Accounts Receivable, $42,000; Credit: Revenue, $42,000
Debit: Maintenance Expense, $42,000; Credit: Accounts Payable, $42,000
Debit: Accounts Payable, $42,000; Credit: Maintenance Expense, $42,000
Debit: Revenue, $42,000; Credit: Accounts Receivable, $42,000
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Which of the following would not require an adjusting
journal entry at the end of an accounting period?Multiperiod costs that must be split among two or more accounting periods
Multiperiod revenues that must be split among two or more accounting periods
Revenues earned in a given period but not as yet recorded in the accounts
Expenses incurred in a given period but not as yet recorded in the accounts
None of these.
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