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Does an accrual normally have a debit or a credit balance? Please elaborate. Please provide a...

Does an accrual normally have a debit or a credit balance? Please elaborate.

Please provide a journal entry.

Business   Accounting   
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Answer #1

ACCRUAL NORMALLY HAVE A DEBIT BALANCE :

THERE ARE TWO METHOD OF ACCOUNT 1) ACCRUAL METHOD 2) CASH METHOD

MEANING : MEASURE COMPANY PERFORMANCE BY RECOGNIZING ECONOMIC TRANSACTION REGARDLESS OF WHEN PAYMENT RECEIVED

ELABORATION: 1) SUPPOSE IN DECEMBER ELECTRIC COMPANY SUPPLY ELECTRICITY TO ITS CUSTOMER , BUT COMPANY WILL NOT BILL CUSTOMER UNTIL FOILLOWING MONTH TO ITS CUSTOMER .TO HAVE PROPER REVENUE IN ELECTRIC COMPANY FINANCIAL STATEMENT ,COMPANY NEEDS TO COMPLETE AN ADJUSTING ENTRY IN DECEMBER TO REPORT REVENUE EARNED IN DECEMBER.

2) UNPAID PROCEEDS OF DELIVERY OF GOODS & SERVICE

EX OF ACCRUAL : ACCOUNT PAYABLE,ACCOUNT RECEIVABLE .

THE JOURNAL WILL BE

ACCOUNT RECEIVABLE DEBIT

TO REVENUE ACCOUNT

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