Accrued revenue:-

Accounts receivable XX

Revenue XX

When received:-

Cash XX

Accounts receivable XX

Accrued expense:-

Expense XX

Accounts payable XX

When paid:-

Accounts payable XX

Cash XX

Prepaid rent:-

Prepaid rent XX

Cash XX

When first month expired:-

Rent expense XX

Prepaid rent XX

------------------------------------------------------------------------------------------------------------
--------------------

Financial ratio:-

1- Current ratio = Current assets/current liabilities

2- Quick ratio = (Current assets- inventory)/current liabilities

 Bank Reconciliation:

Bank reconciliation is prepared periodically to explain the difference between

cash reported on the bank statement and the cash balance on companys
books.

Bank
Bank Statement
Statement Balance
Balance Book
Book Balance
Balance
Deduct:
Deduct: Outstanding
Outstanding Deduct:
Deduct:
checks.
checks. Nonsufficient
Nonsufficient funds
funds
Add:
Add: Deposits
Deposits in
in check
check (NSF).
(NSF).
transit.
transit. Deduct:
Deduct: Bank
Bank
Add
Add or
or Deduct:
Deduct: Bank
Bank service
service charge.
charge.
errors.
errors. Add:
Add: Interest
Interest earned
earned
on checking account.
on checking account.
Add:
Add: Collections
Collections
made
made byby the
the bank.
bank.
Add or Deduct:
Add or Deduct:

Book
Book errors.
errors.