Accounting for Beginners #35 / Adjusting Entries / Journal Entries / Accrued Expense

Accounting for Beginners #35 / Adjusting Entries / Journal Entries / Accrued Expense


what up what up what up everybody CPA
strength back again strongest CPA in Florida actually I’m the fattest CPA in
the florida today we made myself at 270 pounds throwing about 15 pounds since
Hannah taxis and fat boy and the beat man see pH strength you back again what
you doing man I’m doing accounting for beginners this is my classic series
y’all this is your first time you’re going to love it if you’re back again I
know what you’re back again because it’s the best man if it’s the first time
here’s the ooh there it is here’s here’s the best YouTube accounting playlist in
the world hands down in the world what are you going to do today cpu strengths
what are you going to do I want to do 35 now into accounting for beginners 35 and
visibles A&B let’s go let’s go let’s go Ford is in the house boy Yi I’m gonna do
coming for beginners 35 adjusting entries I think this is the fifth one
we’ve done with adjusting entries we’ve done we did depreciation first then we
did deferrals or prepaids when you actually have an outlay of cash through
did two of those the the last one we just did was a crude revenue which
accruing is no cash outlay 34 was a crude revenue you have a revenue with no
cash now this one here 35 that was back here we are 35 hello
35 we’re going accrued expense alright great so we’re doing a crude experience
and I know you already have DC abler debit card asset drugs friends liability
re Ravenel I know you have that if you’re like what’s he talking about go
go watch the playlist and you’ll love me come back to this one come back in the
future and tell me how much you love me now okay cuz I’m gonna go back in time
and tell you how much I love you what up so I know you already have this on your
paper now if you can’t remember from last time you’ve started writing
career equals no – you’re right in that next in here along with other stuff that
you can’t remember every morning every morning don’t be lazy don’t be lazy
every morning write this on your paper that’s the thing everyone wants to be
everyone’s like Oh a year motivational what you’re inspirational I don’t do it
often flashy I get up at 5:00 every morning and I
start hustling and I start grinding and sometimes I don’t want to get up in the
morning what gets me up the haters man so don’t be lazy write this if you can
recruit write that on your piece paper in the morning and get Adam in or
whatever else you can’t remember so a crude expense now you know Noakes you’ve
been writing down a crude equals no cash should I already know you have a
question you have to do a adjusting journal entry on your homework or in
part your class and it’s a career in a crude expense let’s go with let’s go
with what the definition is this is a definite shot of the book an expense
that has been incurred but cash has not been received so if you just read crude
no cash and you see crude no expense you’ll see no cash I think about it okay
if there’s no cash so there’s been no payment what isn’t what happened then
she didn’t do the work he didn’t get the payment and you’ve done nothing so there
wouldn’t be anything so for there to be an accrued expense means there’s no cash
so what’s happened it means you’ve worked you’ve done the expense accrued
no cash did work so I just write no cash because I know the other half of that to
make sense if you slow down means that they’ve done the work they might they
might give you a payroll example that’s what I found in my book so probably the
example is gonna be you know we’re gonna do an expense
and here’s your summary of make a journal on trip that’s big interesting
entry of out of here let’s let’s set the mood
turn your Tiger lights down a little bit set the mood
nice and soft nice and soft it’s been a stressful day forget about it
cow gone away man all right you’ve got payroll you got a little business the
business has one employee gets a hundred dollars a day can you deal yeah great
all right so so a pair of Earl of companies a hundred dollars of any
Friday December 27 if you have a payday you pay for that dancing of the day so
Monday through Friday and you pay them five hundred dollars right you paid them
five hundred dollars on December 27th payday
so that would be jump cook boy on back yeah you know what’s up so that’s five
hundred dollars going out so this journal entry would be a debit $500
salary expense credit yet because you have cash a $500 casual evening expense
is a is a debit positive so that’s why we’ll go over here cash was leaving cat
as an asset so negative negative will be a credit so that’s your journal entry
here great now let’s get to this problem here now we’re going to accrue what are
we going to accrue well hey Tuesday December 31st is the end of the year we
need to get our books we we need to we need to go tell our CPA remember is
preparing our tax returns what the the best representation of what’s going on
December 31st we need to get that together so I need to make adjusted or
not sure for a problem usually if your bookkeeper you’re going down line line
item by line item and seeing does any does any of these expenses or
liabilities or whatever need to need to be adjusted to be changed everything
looked good let me run a Sally same as last year let me look at last year’s but
so look we got that’s Tuesday so two days they’ve worked
they’ve worked look so your employees see your employee has worked two days
you haven’t paid them yet that’s what’s going on with payroll on December 31st
so we’re going to write an adjusting journal entry for December 31st right
here okay now we’re going to write an adjusting journal entry for the for the
salary for the payroll looks for the salary expense
so it’s 282 days that they for work you haven’t paid I’m sorry I already know
it’s going to be $200 $200 debit always always always equals equals equals to
credit sorry you know $200 so look it’s already like half the problem right huh
I got that amounts correct that’s half a problem and I’m getting cash not on how
many cash so I do a just an entry it’s even accrual it even tells me no cash on
my paper paying it okay that’s okay I so good
so about $200 has have they work have they worked has it been incurred yeah
that’s why it’s include expense because I spend suspend Curto recording it the
cash hasn’t been moved so they already work they already work for two days for
that expense line item on the income statement for to be accurate it’s going
to be January 1st through January through December 31st is the whole year
that’s the period for it to be accurate we’re going to have to have 200 all our
salary expense because you you did have people work for two days
so we’re going to turn our salary expenses this is the adjusting entry
here this right here is the adjusting entry
all right colonel are so expense what is our credit gonna be marna what is our
correct angry let’s think about it if this was normal and there was cash there
would be there would just be cash here on the cart just like in this one where
they paid them but there’s not so there’s no cash um that would be normal
so there’s no cash they’d worked we owe them we owe them we owe somebody wages
and so we are we’re liable for some wages and I think what’s the what’s the
line item when we go to my chart of accounts what’s in my chart of account
here is there anything on is there anything on a credit side for a salary
that I would oh so Wow oh so my that’s a liability I’m liable for something I owe
somebody so that would be a liability and all I’m looking at my chart of
accounts on liability there’s a wages payable a payable that’s like building
so that’s gonna be my credit to learn our wages payable in summary for 35
adjusted entries accrued expenses its crude is no cash and expenses ran curve
and I recorded or receive so you’ve done you’ve done someone’s done the work head
and got paid there’s two hundred dollars left over from payday when you are doing
your December 31st adjust the entries the way to signify that is $200 debit
for salaries friends and then it’s $200 credit for wages payable this is an
expense over here hence the name and this is a liability over there yo let me
see how you defend your figure I’ll work on my glow sticks I used to a
little place to go to the club it would glow stick so home all right have fun
till next time till 36 can you believe I love doing you so much thank you very
much mmm and you know what two more days I will be back again because I’m mr.
consistency alright i’ll mr. blow up in your face i’m mister they hate you but
i’m mr. consistency above everything i will see you for 36 the next day FB
deuces

38 thoughts on “Accounting for Beginners #35 / Adjusting Entries / Journal Entries / Accrued Expense

  1. Great video. I have a few questions:

    1. Do Business bank accounts have interest, and if so, does the interest appear on the income statement?
    2. What's the difference between "Costs of Goods Sold" account, and the "Sales, General and Administrations" account?

  2. 5:12 what did he mean by this xD

    jokes aside really great video. They help me a lot, when I don't have time to read, I pick up some quick knowledge, really helpful. I feel like I'm improving in accounting little by little, and I still have time to go to gym =b. My grandparents live in ft lauderdale btw, great beaches and weather.

  3. hey JD I like to eat too. Check out the "group low carb an losing it the original"-on Facebook. you can thank me later lol.

  4. These videos are really great! Just wondering, on this example… How would you adjust things for the Friday payroll (Jan 3)? I'm sure cash gets credited $500. Is salary expense debited $300 and wages payable debited $200?

  5. I got confusion. why this guy said $200 is wages payable on debit acct. that is wrong right. wages payable always in a liability credit acct.

  6. You're the best mate!! I am also lifting so watching your videos is even more enjoyable haha 😀 Peace and give us more pls!!

  7. Great video man, appreciate the effort you put in. Keep these videos rolling in I love them 👊🏻. I’m about to graduate with a degree in accounting. How did you learn to become so fluent in your work. I still find some parts difficult to catch up with in my degree. Is it just a sense of practising and getting real life practical experience? Any advice broo?

  8. Wow, an amazing series thank you so much for your help and sharing your tips and tricks. I appreciate it a lot and you saved my butt from college.

  9. I am taking an online bookkeeping course, and your videos have been clarifying some things better for me. They gave us a book that has all the study information. Some of the writing in the book they gave us is complicated. If I am understanding correctly with accrued expenses – in the book it looks like some examples are: medical benefits, vacation pay, salary. So tell me if my understanding is correct. To me when they accrue those expenses, it seems like they are "setting aside" the funds for those future expenses to make sure they are available at a future date.

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  11. College accounting is killing me! How would you find and adjust balances of “interest payable” and “interest expense” ?

  12. Hi sir I need your help please I have this problem I found in my homework. It says "A payroll for the six-day work week(Mon-Sat) amounted to $6 000. Saturday is payday but Dec. 31 fell on Thursday."

    I already have an idea on what would the adjusting entry should be, but is there an original entry for this transaction based on the data available on the problem above?? If there is, what would it be? If there's none, then may I have a brief explanation as to why? Thank you very much in advance sir! 😄

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