As someone working on their master's in accounting, this video was a fun mental break from govermental accounting :D Thank you for being so awesome, Sal!
4.37 time, i didnt understand the last part.month 4, we earned profit $100, adding previous month cash $500, how did we get to $400,...and not $600. thanks
Don't worry I got confused for this part as well at first. Anyway I'll try to explain this as well as possible. So from month 3 he has $500 in cash, but $200 of that was paid in advance, which means that his total asset is actually only $300 and the other $200 is a liability. In month 4, they did the work to earn the $200, and used up $100 to do the work. See, you're thinking that this $200 is added to the cash, but in actuality it is not since it's already been paid the previous month. In month 4, he's essentially moving the $200 from Deferred Revenue to Revenue, because that's when the profit is actually EARNED. This leaves us with an expense of $100, which he has to be deducted from the Cash. That's why the Cash becomes $500 - $100, which equals $400. Ps. it was 4 months ago and I'm sure you've already figured it out meanwhile, but I thought this part was especially confusing so if there's anyone else who's stumped with this question, I hope my comment help clear up things a bit.
Why in the third month don't we recognize any profit? Since we agreed on the future catering and received a prepayment, aren't we supposed to make profit in this month?
On Month 3, he counted the $200 advancement as cash, but I thought in Accrual Basis, you don't count the cash until the service is provided. So wouldn't that keep the cash balance for Month 3 at $300? Then when we convert the Deferred Revenue to actual Revenue in Month 4, the cash total will still become $400. Right?
Wow... this short video was way better than what our professor taught us in the whole quarter. You are the best!
No he is not
As someone working on their master's in accounting, this video was a fun mental break from govermental accounting :D Thank you for being so awesome, Sal!
Seriously, is there anything that you don't know? you're awesome man been a long time viewer
Best. Tutorials. Ever. Please never stop doing these videos
thanks for this! it really helped me understand how accrual accounts are balanced
Brilliant!!!
Thanks alot sal!!!
Thank you for making this so easy to understand! I'm using this for a class.
This is the best thing anyone could teach me
Going to use this example in my exam if it comes up. Thanks.
I HAD NO IDEA KA HAD ACCOUNTING VIDEOS. THANK YOU
4.37 time, i didnt understand the last part.month 4, we earned profit $100, adding previous month cash $500, how did we get to $400,...and not $600.
thanks
Don't worry I got confused for this part as well at first. Anyway I'll try to explain this as well as possible. So from month 3 he has $500 in cash, but $200 of that was paid in advance, which means that his total asset is actually only $300 and the other $200 is a liability. In month 4, they did the work to earn the $200, and used up $100 to do the work. See, you're thinking that this $200 is added to the cash, but in actuality it is not since it's already been paid the previous month. In month 4, he's essentially moving the $200 from Deferred Revenue to Revenue, because that's when the profit is actually EARNED. This leaves us with an expense of $100, which he has to be deducted from the Cash. That's why the Cash becomes $500 - $100, which equals $400.
Ps. it was 4 months ago and I'm sure you've already figured it out meanwhile, but I thought this part was especially confusing so if there's anyone else who's stumped with this question, I hope my comment help clear up things a bit.
Very good and easy to understand explanation...
Very crystal clear, thank you Mr. Khan
Fantastic! Best explanation on the net
Good refresher. Thank you.
damn. that was a whirlwind. well done Mr. Khan. Time for me to brush up on accounting.
Thanks a lot! Awesome explanation.
Fantastic ..Thanx alot..
Great tutorial! Tks so much! :)
Lecture 7 of this playlist
KA i ove youuuuu
thanks a lot
THANKS
I'm a little confused. Why is it negative 100 in the second month and not 200?
Keshia Benson idk if im right but i think it’s due to the fact that we already had $100 in cash from month 1
Why in the third month don't we recognize any profit? Since we agreed on the future catering and received a prepayment, aren't we supposed to make profit in this month?
On Month 3, he counted the $200 advancement as cash, but I thought in Accrual Basis, you don't count the cash until the service is provided. So wouldn't that keep the cash balance for Month 3 at $300? Then when we convert the Deferred Revenue to actual Revenue in Month 4, the cash total will still become $400. Right?
Brian St.Clair ua-cam.com/video/t6FvdVQni8w/v-deo.html
just an addition to the end of the problem, the deferred revenue will become 0.
So you subtract expenses from revenues thats why it total cost is $100
A trick I learn for a deferred has able in it
what can you NOT do...!! thank you
Name a topic this gentleman hasn't taught 😃