Accounting Comic Strip
Storyboard Text
- Introduction
- Hey. Can I ask you some questions?
- Sure. Ask Away
- Questions
- So I've just applied for my new job at the accounting firm across the street, but they want me to do "Accruals" and "Deferrals."
- I don't know what they were talking about! I knew you had some experience, mind telling me about them?
- Ah, I see. Those terms can be a bit confusing when you start with them. Sure, I can give a few tips.
- Accrued Expense/Accrued Revenue
- That's great!. So, what are these "Accrued" accounts?
- These are represented as Accounts Payable and Accounts Recievable. We have the amounts available, but we haven't paid or recieved cash yet.
- Well, think of the "A" in accrued as "Aquired:" We get them before the cash flows.
- Prepaid Expense/Unearned Revenue
- Okay. But What about those "Deferred" accounts?
- Think of the "D" in deferred as "Dollars" We pay them off before getting them.
- These are those Prepaid Expenses and Unearned Revenues. They are assets and liabilities, respectively, until they are used or aquired.
- Reversing Entries
- Interesting. One more thing, I overheard about them doing "reversing entires." are those like closing entries?
- Yeah. Pretty Much. Reversers are for when we pay or earn accrued accounts or use deferred accounts. It's then when cash flows.
- Conclusion
- Ah, OK. Thanks for those tips, that will be very helpful!
- Anytime. If you need any more help, you know where to find me.
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