Accouting Tutorial

Accounting Formats, Accounting Guide, Tutorials














Assets

Cash

Accounts Receivable

Inventory

LESS
Liabilities

Accounts Payable

Deferred Revenue

EQUALS
Fund Balance

Beginning Fund Balance

Revenues

Expenses

Fund Additions

Fund Deductions


Liabilities Money or services owed to someone who has provided the University a good or service.

Examples of liabilities at the University are Accounts Payable and Deferred Revenue.

Accounts Payable Money owed to someone who has provided the University with a good or service.

Example: Your department buys a computer from Gateway. Gateway will ship the computer to your department and send an invoice to Accounts Payable (the department in FSO who processes invoices and cuts checks). An invoice is a request for payment, i.e. a liability, an Accounts Payable.


Deferred Revenue Services owed for monies received.

Example: Someone gives you $1,000 to dig a ditch, you agree and take the money. You now owe that person a ditch, i.e., you haven't earned the $1,000. Revenue that hasn't been earned yet is called Deferred Revenue and because you owe someone something, in this case, a ditch, deferred revenue is a liability. When you dig the ditch, you will have earned the revenue and can record the $1,000 as revenue.


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