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Two questions here, please answer clearly and thoroughly your help is very appreciated!
First Question
Are there 3
Second question
I am confused about the accounts used in adjusting entries. The accounts seem to be contradictory.
1. Accrual Adjustment-
2) Prepayments and Deferrals
accounts used in this entry are Cash/Unearned Revenue and Unearned Revenue/Service Revenue.
Again the confusion here is that Cash is an asset. Revenue should also be an asset because it is money coming into the company. Please explain how I am wrong .
Unearned Revenue/Service Revenue
These are both Revunue accounts. How can they be adjusted at the same time? Why is one a debit account why is one a credit account?
Special Adjustments
The accounts for these type of entries are Income Tax Expense/Income Tax Payable.
Why is Tax used twice? I see how it can be an expense, but I don't see how it would be a payable.
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