As the business earns revenue, the unearned revenue balance is reduced with a debit, and the revenue account balance is increased with a credit. Unearned revenue is recognized and converted into earned revenue as products and services get delivered to the customer. Once a company delivers its final product to the customer, only then does […]

If you want more details about your company’s finances, you can use an expanded accounting equation. As a result of this transaction, the asset (cash) and the liability (accounts payable) both decreased by $8,000. As a result of this transaction, the liability (accounts payable) and asset (furniture) both increased by $16,000. Single-entry accounting is a […]

The debit to income summary should agree to total expenses on the Income Statement. We need to complete entries to update the balance in Retained Earnings so it reflects the balance on the Statement of Retained Earnings. We know the change in the balance includes net income and dividends. Therefore, we need to transfer the […]

Lisa joined Carpenter & Company in 2009 and has worked with several contractors over the years. While being responsible for overall client services, Lisa’s specialty is in construction payroll services. Wade has over 30 years of experience in public accounting, working with contractors from the smallest mom-and-pop companies to multi-billion dollar international construction bookkeeping firms. […]