[Q1] The entity sold merchandise at the sale price of $50,000 in cash. The cost of merchandise sold was $30,000. Prepare a journal entry to
Adjusting entries are prepared to adjust account balances from cash basis to accrual basis. © AccountingInfo.com
Accruals Accrued revenues and expenses are recognized before cash is received or paid. Under accrual basis accounting, revenues are recognized when they are earned even
CASH BASIS ACCOUNTING Under cash basis accounting, revenues are recognized when cash is received and expenses are recognized when cash is paid. ACCRUAL BASIS ACCOUNTING
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Steps of accounting cycle 1. Prepare journal entries 2. Post to the ledger 3. Prepare unadjusted trial balance 4. Prepare adjusting journal entries 5. Prepare