Question

LUPY % om + Add Page Insert Table Chart Text Shape Media Comment 1-Providing consulting services receiving cash. Given answer: Ali company provides consulting service and receives 1,000 cash. Cash. 1,000 Consulting Revenue. 1,000 2-Issuing common stocks receiving cash. 3-Purchasing land for cash. 4-Purchasing supplies on credit. 5-Borrowing money from a bank. 6-Paying employees their salaries. Q2- Why do companies record adjusting journal entries at the end of the accounting periods? Give an example of unearned revenue and accrued expense.

Answer 1

Q1.
1.	Cash A/C
	To Issue of commin stock
2	Land
	To Cash
3	Supplies A/C
	To Sundry Creditors A/C
4	Bank A/C
	To Loan A/C
5	Salaries A/C
	To Cash A/C
	if we are booking the salaries entry before we paid
	Salaries A/C	Nominal AC
	To Salaries Payable A/C	Representative Personal AC

Q2.	Adjusting entries made because sometimes we may have not received invoices for certain expenses but services has been received. To conform with the accrual conepts of accounting we need to book the adjustment entries. Same case with the revenues also. If we have already made the sales but not received the amount still we have to book the entry.
	Unearned revenue
	Payment received but service yet to be provided. It’s a liability to the business provider. As per rule amount should be recordrd when it is earned.
	Eg: Advance received for software service
	Bank A/C
	To Unearned revenue
	Accrued Expenses
	Expenses incurred but not paid. Liability to the company
	Eg: Salaries payable, interest payable
	Entry
	Interest A/C
	To Interest payable A/C

Q3. Income statement one of the financial which needs to prepared by the business as prescribed by the different countries accounting boards.

a. It explains the company's income and expenditure made during the particular accounting period.

b. It shows the how much we earned in a particular period.

C.Shows companies financial status as on for particular period.

d. Also shows whether all the expenditures are booked and accounted properly in a summarized manner.

e.It gives information about indirect expenses.

f. It gives the operating result of the company.

g. It is tool for the management and investors for making the investments.

Income statement of Max Company	Details	Amount($)
Revenue(A)		70,000.00
Less: Expenses(B)
Supplies	3,000.00
Rent Expenses	6,000.00
Wages Expenses	22,000.00	31,000.00
Net Profit (A-B)		39,000.00