Contra Entry Journal

A business has a balance due from a customer on its accounts receivable ledger, but also owes the customers business an amount on its accounts payable ledger for goods supplied. A contra entry is used to offset the two amounts, leaving a net amount outstanding to the customer.

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Accrued Income Tax

A business has an estimated annual income tax expense of 14,000 due of profits for the accounting period. A demand for the amount has not yet been received from the tax authorities, and the expense has not been recorded in the accounting records. An accrued income tax adjusting entry is made in the accounting records.

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Received Utilities Bill

A utilities bill will be recorded as an expense to the business. As the business is given credit by the supplier, the other side of the accounting equation is a liability to the supplier (accounts payable).

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Purchase Services on Account

Purchasing services on account will be recorded as an expense to the business. As the services are purchased on account, the other side of the accounting equation is a liability to the supplier (accounts payable).

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Unearned Revenue Journal Entry

Unearned revenue is generated when a business supplies its services to a customer and the services are invoiced in advance.

For example, suppose a business provides maintenance services and invoices for annually in advance. At the time of invoicing the service has not been provided and none of the revenue has been earned, it therefore needs to be credited to the unearned revenue account.

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Cash Discount Received

A business has been invoiced 500 for goods and takes a 2% cash settlement discount for early payment.

The original invoice would have been posted to accounts payable, so the balance before settlement on the suppliers account is 500. A 2% discount on 500 is 10, and the amount of cash the customer pays is therefore 490.

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NSF Check

An NSF check is one which has been returned to a business by a bank due to lack of funds on a customers account. Since the business has already entered the check into their records, a journal entry is required to reverse the entry.

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