What is unearned Income ? Accounting with example.

What is Unearned Income? In Accounting term,Unearned incomes are those Incomes That are received but not earned.The term has a different meaning in tax perspective, Income derived from other than personal effort such as dividend, interest etc. Here we are considering unearned income as an accounting term and its accounting process. Examples of Unearned Income We can explain unearned income in accounting as an Income received during a period but applicable to the next period is termed unearned income.Suppose for

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What is accrued Income?

An income which is due but not received on the date of closing the books is known as accrued income. For example,when the books are closed on 31st march March 2016,Interest on certain securities has fallen due. 2500. But the  interest received is only 2000; So the accrued  interest amounts to 500.Before the books are closed,the income account should be credited with this additional 500,and an asset account should be debited with the income receivable.The adjusting journal entry will be made

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What is accrual? How it is accounted?

Accruals are the earnings of Income and incurred expenses which are not accounted in our books of accounts so far.Accruals are those expenses and earning which are recorded through adjusting entries in the books even if payment is made or received at the time accounting. A few examples can understand you the accruals better. Why Accrual Accounting? Accrual Accounting Helps to understand the accurate position of a company’s current financial situation as it record the expenses and Income which are become due.In other words it

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