On March 30, 2021 Ortiz LLC provided accounting reservices for Beker Law firm and sent them a bill for $5,000. Payment has not been received to this day. 2. Store supplies of $200 are on hand. The supplies account shows a $1,900 balance. Deferrals: 1. On April 1, 2021. ORTIZ LLC paid $12,000 for a one-year insurance Policy.
Describe 2 accrual transactions and 2 deferral transactions. For the accrual transactions, please use credit or debit sales and credit purchase. For the deferral transactions, please use prepaid insurance and prepaid telephone charges. Note: This can be made up amounts, just as long as they make sense. This is for an Electrotechnology Sales and Repairs business. Please include the dates that the transactions occurred. Please see below, as I have included an example of what the end product should look like. Please include an explanation as to what was done.
Accruals:
1. On March 30, 2021 Ortiz LLC provided accounting reservices for Beker Law firm and sent them a bill for $5,000. Payment has not been received to this day.
2. Store supplies of $200 are on hand. The supplies account shows a $1,900 balance.
Deferrals:
1. On April 1, 2021. ORTIZ LLC paid $12,000 for a one-year insurance Policy.
2. On February 1, 2021 . ORTIZ LLC received $20,000 for accounting services for 1 year.
Accrual transactions are the transaction which are recorded on happening of event without considering actual realisation or disbursement of cash. It reflects the true view of the performance of business.
Deferral transactions are those which are not recognised immediately but recognised after certain period. This occurs when we pay some expenses for more than the period of financial year or received in advance. In this, we create asset or liability instead of expense or income.
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