## What is a Journal Entry?

A journal entry is used to record financial transactions in accounting.

## CECL Excel Workbook

If you would like to use the Excel workbook that was used to create the Universal CPA lecture on CECL for debt securities, please click the link below to download the Excel workbook: CECL Calculation workbook (Universal CPA Review)

## Variance Analysis Excel Workbook

If you would like to use the Excel workbook that was used to create the Universal CPA lecture on variance analysis, please click the link below to download the Excel workbook: Variance Analysis Lecture Example

## Equity Method Excel Workbook

If you would like to use the Excel workbook that was used to create the Universal CPA lecture on the equity method, please click the link below to download the Excel workbook: Equity Method Lecture Example https://youtu.be/QE4flnmuSkw

## How to calculate cash to accrual adjustment for deferred revenue?

Deferred revenue (liability) will be increased when the company collects cash from customers related to revenue that cannot be recognized (i.e., unearned as performance obligations have not been satisfied). Deferred revenue will be decreased when the company recognizes revenues that was previously categorized as unearned revenue. On the exam, you could be asked for the amount of cash collected that is related to unearned revenue or the amount of revenue recognized that were previously unearned. For example, if the beginning balance was \$500 and the ending balance was \$350, and the question told you the company collected \$250 of cash from customers that was for deferred or unearned revenue, then you would know that the company was able to recognize \$400 of deferred revenue during the period.

## How to interpret the breakeven point in units?

The formula for calculating breakeven point in units is to take total fixed costs and divide by contribution margin per unit. Contribution margin per unit is calculated as revenue per unit minus variable costs per unit. The output of this formula will tell the company exactly how many units they need to sell to cover their fixed costs. If they end up selling more units, they will generate a profit, and if they sell less units, they will incur a loss. For example, if the breakeven point in units is 100 units, and the company will sell more than 100 units, they will generate a profit. If they sell less than 100 units, the company would generate a loss.