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General Accounting Discussions: Prepaid Amount

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  1.  
    • CommentAuthorAdem
    • CommentTimeJul 16th 2007
     
    1. what is the transaction that i will make if i deposit to cement factory inorder to deliver me an amount of 100,000,
    and after they deliver me 10,000 what will be the transaction.
    2. If i get advanced money in order to deliver cement to another small contracting company , the small company deposit an amount of 20,000 what will be the transaction, also if i supply them 10,000 what will be the transaction .

    Thank u
    • CommentAuthoradaclarke
    • CommentTimeJul 17th 2007
     
    DR Cement 100,000
    CR Cash 100,000

    CR Cement Expense 10,000
    DR Cement 10,000
    This is my best guess, to treat the purchase as if you would supplies or prepaid insurance

    DR Cash 20,000
    CR Unearned Revenue 20,000
    To record the deposit received in advanced

    DR Unearned Revenue 10,000
    CR Cement Revenue 10,000
    To record revenue from cement delivery

    Hope this helped, I don't know anything about the cement business.
    Thankful People: Adem
    • CommentAuthorAdem
    • CommentTimeJul 17th 2007
     
    Thank u very much Adaclarke for ur assitance and i hope to continue like what you r .

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