10+ Aisling Cloud Technologies Interview Questions and Answers

Deferred revenue is a concept where revenue is received in advance but recognized as income over time as the goods or services are delivered.

• Deferred revenue is a liability on the balance sheet until it is earned.

• When revenue is received in advance, it is recorded as a debit to cash and a credit to deferred revenue.

• As the goods or services are delivered, the deferred revenue is recognized as income by debiting deferred revenue and crediting revenue.

• Examples of deferred revenu...read more

Accrual is recognizing revenue and expenses when they are incurred, provision for depreciation is setting aside funds for asset depreciation, bad debts are uncollectible debts, journal entries record financial transactions.

• Accrual is the accounting method of recognizing revenue and expenses when they are incurred, regardless of when cash is exchanged.

• Provision for depreciation is the allocation of funds to account for the decrease in value of assets over time.

• Bad debts are de...read more

COGS can be found by subtracting ending inventory from beginning inventory and adding purchases. Unbilled revenue is revenue that has been earned but not yet billed to the customer.

• COGS = Beginning Inventory + Purchases - Ending Inventory

• Unbilled revenue is revenue recognized in the income statement but not yet invoiced to the customer

• Unbilled revenue is a liability on the balance sheet until it is invoiced

Accrual is recognizing revenue and expenses when they are incurred, not when cash is exchanged. Deferred revenue is when payment is received before revenue is earned.

• Accrual accounting matches revenue and expenses to the time period they are incurred, not when cash is exchanged

• Deferred revenue is when a company receives payment for goods or services before they are actually delivered or earned

• Accrual accounting provides a more accurate representation of a company's financial ...read more

Unbilled revenue refers to revenue that has been earned but not yet invoiced to the customer.

• Unbilled revenue is recorded as a current asset on the balance sheet.

• The journal entry for unbilled revenue involves debiting unbilled receivables and crediting revenue.

• Once the invoice is generated, the unbilled revenue account is credited and accounts receivable is debited.

• Unbilled revenue is common in service-based industries where work is completed before invoicing.

• Unbilled revenu...read more

Outstanding expenses are unpaid bills while accrued expenses are expenses incurred but not yet paid.

• Outstanding expenses are recorded as accounts payable on the balance sheet.

• Accrued expenses are recorded as liabilities on the balance sheet.

• Examples of outstanding expenses include unpaid rent, utilities, and vendor invoices.

• Examples of accrued expenses include salaries, interest, and taxes.

• Both outstanding and accrued expenses are recognized in the income statement as expense...read more

Unbilled revenue should be accounted for when it is earned but not yet invoiced to the customer.

• Recognize unbilled revenue when the performance obligation is satisfied and revenue is earned.

• Record unbilled revenue as an asset on the balance sheet.

• Adjust unbilled revenue periodically to reflect the actual amount that should be billed to the customer.

• Example: A construction company completes a project in December but does not bill the customer until January. The revenue earned ...read more

Provision for bad debts is an accounting entry made to account for potential losses due to non-payment of debts.

• Provision for bad debts is a contra asset account that reduces accounts receivable on the balance sheet.

• It is based on an estimate of the percentage of accounts receivable that will not be collected.

• The entry is made by debiting the provision for bad debts account and crediting the accounts receivable account.

• The provision for bad debts account is adjusted periodica...read more

Accrual of expenses refers to recognizing expenses in the period they are incurred, regardless of when they are paid.

• Accrual of expenses helps in matching expenses with revenues in the same accounting period.

• Examples include recognizing salaries expense for work done by employees even if the payment is made in the next month.

• Another example is recognizing interest expense on a loan even if the payment is due in the next quarter.