Ask Experts Questions for FREE Help !
Ask
    CpaSoon's Avatar
    CpaSoon Posts: 3, Reputation: 1
    New Member
     
    #1

    Nov 23, 2013, 08:12 PM
    Billed meaning in accounting
    How do you interpret this:
    "Billed Rio Company 6,000 for services performed. A 50% down payment was received."

    - Where am I going to put it in a t account? What I am planning to do is to debit 6000 on acc. Receivable then after that I don't know anymore what to do next. Hehe. Im confused with the down payment
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #2

    Nov 23, 2013, 08:20 PM
    Services performed means you provided a service to a customer so you have Service Revenue. The amount is 6,000 and received 50% down payment. This means that you billed a customer 6,000 for a service you provided and you received 50% in cash or 3,000 which means the customer still owes you 3,000. So your accounts will be Cash for the cash received and Accounts Receivable for the amount the customer owes you.

    Now your journal entry will be:
    Debit Cash for 3,000 (this is the 50% down payment from the 6,000 billed)
    Debit Accounts Receivable for 3,000(this is the amount the customer owes you from the 6,000 bill)
    Credit Service Revenue for 6,000 (this is the total amount of service provided to a customer.

    Note. You have two debits of 3,000 which equals 6,000 and you have a credit for 6,000. This means your journal entry balances because your debits and credits equal 6,000.
    CpaSoon's Avatar
    CpaSoon Posts: 3, Reputation: 1
    New Member
     
    #3

    Nov 25, 2013, 12:38 AM
    Thank you so much for your help! =))))
    CpaSoon's Avatar
    CpaSoon Posts: 3, Reputation: 1
    New Member
     
    #4

    Nov 25, 2013, 01:15 AM
    Can I ask another question? What if this is the problem:

    "signed a contract of lease for a monthly rental 10000"
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #5

    Nov 25, 2013, 08:29 AM
    There is no journal entry required. The company signed a legal document to pay 10,000 a month in rent.

    The only time it will matter in a homework problem is when you have a problem where you have adjusting entries like in an accounting cycle or are preparing financial statements for a partial or whole year.

    Based on the statement above the company would pay rent at the beginning or the end of each month. Your journal entry when the rent is paid at the end of the month is:
    Debit Rent Expense for the amount paid
    Credit Cash for the amount paid

    Beginning of the month:
    Debit Prepaid Rent for the amount paid
    Credit Cash for the amount paid

    At the end of the month you will have an adjusting entry for Prepaid accounts. The adjusting entry will be:
    Debit Rent Expense for the amount of rent used in the month(or number of months used in the accounting period)
    Credit Prepaid Rent for the same amount
    Note: This entry transfers the amount of rent that has been paid in advance of use to an expense account, thereby following the US GAAP Matching Principle which matches expenses to the period in which they are incurred and revenues to the period they are earned.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

All types of Accounting entries with meaning [ 6 Answers ]

Hi Am preparing all types of accounting entries with meaning, could you please help me in this

When you say BILLED in accounting what is the entry? [ 1 Answers ]

Here is the problem : -Billed DLSU professors 15,000 for the processing of their travel papers. And the other is -Arranged a pilgrim trip for DLSU prof. Billed PAL 10,000 as a commission. What is the entry in a general journal? And what is the credit and debit?

Meaning of Distributions in the accounting equation [ 1 Answers ]

Hi what does it mean by distribution in the accounting equation. Does this include things like discounts or money given to shareholders.

Meaning of Accurals in Accounting Terminology [ 1 Answers ]

Hi, Can you please explain me the meaning of Accurals. Perticularly Audit Accurals. Thanks in Advance Thanks & Regards Venkat

Accounting entries- billed services [ 3 Answers ]

The follo0wing are the balances in the acocunts for Joan Miller Advertising Agency as of January 31, 2001 Fees Receivable Debit $200 Wages Payable Credit $180 During the month of Feb, the agency engaged in the following transactions: Feb 8 . Completed the series of advertisements for...


View more questions Search