Separate earned from received
See this course’s project requirements
A fictional month-end adjustment packet with accruals, prepayments, depreciation, corrected trial balance and reconciled income statement.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- An earned-revenue adjustment journal and posted balances.
- An unpaid-wage accrual and later-settlement distinction.
- A prepaid-rent release schedule and asset/expense posting.
- A depreciation assumption schedule and gross/contra/net bridge.
- A posted adjustment journal and complete adjusted trial balance.
- An adjusted income statement, balance-sheet bridge and changed-earned-revenue check.
Review and revise
Use these criteria to check your work and choose what to improve.
- Cutoff: each adjustment has period evidence.
- Journal: debit/credit accounts and amounts are correct.
- Posting: adjusted balances and totals reconcile.
- Statements: profit and net assets obey the accounting equation.
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The idea in everyday life
Original fictional practice. All money is USD. No account, payment, personal record or outside participation is required. Original fictional month-end unadjusted trial balance: debit cash 5,000; accounts receivable 1,000; prepaid rent 1,200; equipment 2,400; wages expense 600. Credit accounts payable 800; unearned revenue 1,200; owner capital 6,200; service revenue 2,000. Each side totals 10,200. Month-end evidence:400 of advance service was earned;300 service earned but unbilled;250 wages incurred/unpaid; prepaid rent covers three equal months including this one; equipment cost 2,400, zero residual,24-month straight-line life, full month in use. No other transactions, tax, drawings or opening accumulated depreciation.
Accrual revenue follows earned service rather than cash timing.
Separate earned from received — complete worked case
Accrual revenue follows earned service rather than cash timing.
Original fictional month-end unadjusted trial balance: debit cash 5,000; accounts receivable 1,000; prepaid rent 1,200; equipment 2,400; wages expense 600. Credit accounts payable 800; unearned revenue 1,200; owner capital 6,200; service revenue 2,000. Each side totals 10,200. Month-end evidence:400 of advance service was earned;300 service earned but unbilled;250 wages incurred/unpaid; prepaid rent covers three equal months including this one; equipment cost 2,400, zero residual,24-month straight-line life, full month in use. No other transactions, tax, drawings or opening accumulated depreciation.
Unadjusted original trial balance
Paste at A1.
| AAccount | BDebit | CCredit |
|---|---|---|
| Cash | 5000 | 0 |
| Receivable | 1000 | 0 |
| Prepaid rent | 1200 | 0 |
| Equipment | 2400 | 0 |
| Wages expense | 600 | 0 |
| Payable | 0 | 800 |
| Unearned revenue | 0 | 1200 |
| Capital | 0 | 6200 |
| Service revenue | 0 | 2000 |
Copy as plain text
1. 1.1 Separate
Mark period-end service evidence and distinguish the two revenue cases.
You should see: An advance obligation is released; a new receivable is recognized.
2. 1.2 Separate
Write balanced debit-unearned/credit-revenue 400 and debit-receivable/credit-revenue 300.
You should see: Both entries balance separately.
3. 1.3 Separate
Post to affected balances without touching cash.
You should see: Unearned 800, receivable 1,300, revenue 2,700.
4. 1.4 Separate
Change advance earned to 600 and repeat only that dependency.
You should see: Unearned 600 and revenue 2,900; receivable unchanged 1,300.
What to finish
An earned-revenue adjustment journal and posted balances.
Watch for this
Treating all advance cash as current revenue before the service is earned.
How can I tell I understand it?
Verify that your completed earned-revenue adjustment journal and posted balances meets the three lesson-specific checks and retains the supporting original records.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
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Pass the check. We’ll save the progress.
Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
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Sources and further reading
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Source & access notes · checked 2026-10-01
Read earned/incurred versus received/paid and period boundary; no current tax-basis claim inferred.
Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.
Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.
Source & access notes · checked 2026-10-01
Read accrued revenue/expense, deferral release and depreciation contra-asset entries.
Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.
Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.
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