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    maizy886's Avatar
    maizy886 Posts: 11, Reputation: 1
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    #1

    Dec 5, 2013, 11:41 AM
    Accounting HELP! Self-review questions
    Yes/No Questions I am stuck on. Racking my brain trying to study and I can't figure these out. Any help is greatly appreciated!

    Recording unearned income requires a credit to cash?
    my answer, no. I think it would go under another account more specific to the unearned income like Unearned rent/ rent revenue

    Do journal entries always have to contain both debits and credits?
    my answer Yes, otherwise accounts are unbalanced

    When recording income, a revenue account must always be credited?
    my answer, yes. Confused on this one

    When notes are collected, cash is debited for their maturity value?
    my answer, no. They are debited for maturity value when it reaches maturity?

    Please let me know if I am right or where I went wrong! Thank you!
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Dec 5, 2013, 11:59 AM
    Your journal entry to record unearned revenue is:
    Debit Cash and Credit Unearned Revenue for the amount received.
    This is when someone pays in advance for a good or service like a magazine subscription where someone pays in advance for a yearly subscription.

    When the revenue is earned your journal entry will be:
    Debit Unearned Revenue and Credit Revenue for the amount earned.

    Your other entries are correct.

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