Net increase in assets of $35,000 and a net increase in liabilities of $35,000. b. e. Children whose aggression successfully intimidates other children may become more aggressive. a. consolidation process. Accrued expenses, also known as accrued liabilities, are expenses recognized when they are incurred but not yet paid in the accrual method of accounting. Other expenses might include interest paid on loans. b. intangible assets. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Deferred revenue is initially recorded as: In order to recognize revenues when they are earned, recognize expenses when they are incurred, or match expenses with revenues, accountants must often use good guesses, amounts incurred to generate revenue, such as cost of goods sold, operating expenses, interest, and taxes, Expenses associated with borrowing money and extending credit to customers, Cost of getting the goods to the business, amount that remains once the cost of a product or service is subtracted from revenue, A sum paid or charged for the use of money or for borrowing money, These are negative amounts realized on the sale of assets and lawsuit damages. d. A classified balance sheet, Which of the following is an example of an intangible asset? matching principle: Expenses should be matched with revenues. (Certain investments will be shown at fair value instead of cost. From insightful reporting to budgeting help and automated invoice processing, QuickBooks can help you get back to the daily tasks you love doing for your small business. a. a fixed asset. For example, if you complete a printing order for a customer, and they dont like how it turned out, they may refuse to pay. $1,100 Tax and bookkeeping basics you need to run and grow your business. b. If your small business accepts credit sales, you run the risk of encountering something called a bad debt expense. Bad debt expenses are outstanding accounts that, after some time going unpaid, are deemed uncollectible. The liabilities that are due to be paid usually within a year or less are called: These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Expense recognition. While most costs of doing business can be expensed or written off against business income the year they are incurred, capital expenses must be capitalized or written off slowly over time. Prepaid expenses are recorded first on the balance sheet in the prepaid asset accountbecause it represents a future benefit due to the business. \end{array}\right] \quad E=\left[\begin{array}{ll} "Tangible Property Regulations-Frequently Asked Questions. Expenses are incurred when a resource is consumed. \hline 4 & 18 \\ Percentage of bad debt = total bad debts/total credit sales. a. debit Equipment $3,500; credit Depreciation Expense $3,500. An expense isthe cost of operations that a company incurs to generate revenue. Establish a clear credit policy with payment expectations. This offer is not available to existing subscribers. d. Rent revenue. accrued expense payable, income tax expense The following discussion took place between Lucas Hunter and Simmons controller, John Jameson, in January, after the close of the fiscal year. d. a liability. In order for the financial statements to be correct on the accrual basis of accounting, the accountant must record an adjusting entry dated as of December 31. Balance Sheet: Retail/Wholesale - Corporation, Income Statement: Retail/Whsle - Corporation, Multiple-Step. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. \end{array} In contrast, under the. \end{array} \end{array}\right] The accrual method of accounting required revenues and expenses to be recorded in the period that they are incurred, regardless of the time of payment or receiving cash. \end{array}\right] \quad B=\left[\begin{array}{llll} a. Wage expense is typically the gross wages paid to the employee. Support items reported on your tax returns Resources to help you fund your small business. How much cash will be paid on Friday? d. an expense account is credited. b. As of December 31, the hourly-paid employees have earned $3,000 of wages for which they will be paid on the first Friday in January. a. When your business decides to give up on an outstanding invoice, the bad debt will need to be recorded as an expense. d. Cost reporting, Economics Aggregate Supply and Aggregate Dema, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition, Intermediate Accounting, Volume 1 (Chapters 1-14) Problem Solving Survival Guide. b. \hline 2 & 10 \\ Liquidity reporting 520460980Jr.500400900Sr.480380860Total2,2001,8004,000. Patents Expenses are used to calculate net income. The adjusted trial balance is prepared after adjusting journal entries have been recorded. Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n): The cookies is used to store the user consent for the cookies in the category "Necessary". Readers should verify statements before relying on them. Which type of adjusting entry is for expenses incurred but not yet paid in cash or recorded? Accrued expenses $2,475 Accounting Principles Explained: How They Work, GAAP, IFRS, Accounting Standard Definition: How It Works, Accounting Convention: Definition, Methods, and Applications, What Are Accounting Policies and How Are They Used? a. is increased by the amount of the depreciation. Accountants can show an amount less than cost due to conservatism, but accountants are generally prohibited from showing amounts greater than cost. The accounting cycle Accruals are revenues earned or expenses incurred which impact a company's net income, although cash has not yet exchanged hands. X&Y Co. received $4,000 in payments from clients for services billed in a previous month. In other words, the cost of goods sold and expenses are matched to sales and/or the accounting period when they are used, not the period in which they are paid. The latest research and insights for Small Businesses from QuickBooks. an adjusting entry for accruals (accrued revenues or accrued expenses) will increase both a . Accordingly, the information provided should not be relied upon as a substitute for independent research. What is the main idea of the behavioral perspective on personality? Which of the following is not reported as revenue on the income statement? 1 & 0 & 4 \\ Common expenses include payments to suppliers, employee wages, factory leases, and equipmentdepreciation. How to find funding and capital for your new or growing business. Every entry must contain a debit and a credit. This cookie is set by GDPR Cookie Consent plugin. The payment was received in February. A=[102321403]B=[113042113201]A=\left[\begin{array}{rrr} Reflects a purchase made on credit. Accrued revenue is shown on a balance sheet as: a. b. debit Depreciation Expense $3,500; credit Equipment $3,500. a. not taken into consideration. How many of the rookies received a rating of 4 or better? Analytical cookies are used to understand how visitors interact with the website. Oftentimes an expense is not recognized at the same time it is paid. insurance expense 200 This cookie is set by GDPR Cookie Consent plugin. when cash has been paid or received but neither expenses nor revenue were recognized. In order to comply with the matching principle, the account Wages and Salaries Expense must include the $3,000 of wages in order to match the December wages expense with the December revenues. Which of the following statements is false? Timothy Li is a consultant, accountant, and finance manager with an MBA from USC and over 15 years of corporate finance experience. supplies 1500 Prepaid expenses are first recorded in the prepaid asset account on the balance sheet. These include utilities and the cost of goods sold. How to calculate and improve DSO. a. The IRS treats capital expenses differently than most other business expenses. Relevant resources to help start, run, and grow your business. Create a spreadsheet similar to Table 14.3 to analyze whether the firm should initiate the proposed cash discount. c. $50,000 Assume that the last day of the month falls on Thursday. Examples of expenses include rent, utilities, wages, salaries, maintenance, depreciation, insurance, and the cost of goods sold. What side of the account increases Assets? Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. What Is the Financial Accouting Standards Board (FASB)? c. A non-cash resource is consumed after cash is paid d. A service is rendered before payment of cash. Expenses recognized when incurred, even if cash is not paid. Accrued Revenue A revenue that has been earned but for which the cash has not yet been collected. Companies break down their revenues and expenses in their income statements. As soon as you receive the invoice, you record in the accounts payable liability account the amount that you owe. The adjusting entry will consist of a debit of $2,000 to Interest Expense (an income statement account) and a credit of $2,000 to Interest Payable (a balance sheet account). b. a. current assets. Reported on the income statement, they are the amount by which the proceeds are less than the asset's value on the company's books, subtracting interest expense and income taxes from operating profit, Goods the business has at the start of the period, expenses that rise or fall based on your sales volume (aka variable expenses), subtracting operating expenses, such as selling, general and administrative expenses from gross profit, generally don't relate to the operating side of the business, rather to how the management finances the business. accumulated depreciation 40, utilities expense Lucas: Ive been reviewing our financial statements for the last year. Prepare your tax return You need good records to prepare your tax returns. d. Net increase in assets of $75,000 and a net decrease in liabilities of $30,000, b. Using the same information from Exercise earlier and assuming a 25%25 \%25% tax bracket, what would be the net effect of investing at 8%8 \%8% for 202020 years if taxes on the earnings were paid from the investment fund each year? Accountant vs. Financial Planner: What's the Difference? NOT NECESSARILY WHEN CASH IS PAID/RECEIVED. a. when they are incurred, whether or not cash is paid. How to record the bad debt expense journal entry. When expense is incurred PP expense is reduced and expense is recorded. Cash and other assets that are expected to be converted to cash or sold or used up within one year or less through the normal operations of the business are called: a. \hline Expenses can be defined as fixed expenses, such as rent or mortgage; those that do not change with the change in production. What Is the Accounting Equation, and How Do You Calculate It? b. What is causing the plague in Thebes and how can it be fixed? Gross Profit vs. Net Income: What's the Difference? In 2023, the van will be used for 3 months only (January to March) since it has a useful life of 5 years (i.e. In other words, there is nothing to undo or balance as bad debt if your business uses cash-based accounting. The registrar of a university with a population of N=4,000 full-time students is asked by the president to conduct a survey to measure satisfaction with the quality of life on campus. Barry Company received $8,000 full payment in advance for services that are 60% complete at the end of the period. Businesses are allowed to write off tax-deductible expenses on their income tax returns to lower theirtaxable incomeand thus their tax liability; however, the Internal Revenue Service (IRS) has strict rules on which expenses businesses are allowed to claim as a deduction. In Exercise 1-1, you were asked to obtain a recent annual report of a company that you were interested in reviewing throughout this term. Because it is unnecessary to report amounts owed to employees for salaries or wages earned. It is possible to incur an expense without having any corresponding supplier invoice or payroll payment to record the event; this arises when the supplier invoice has not yet arrived, or an employee has not yet been paid. In analyzing the investment in accounts receivable, use the variable cost of the product sold instead of the sale price because the variable cost is a better indicator of the firms investment. b. When do you have accrued expenses what do you call them? b. that the net income reported is accurate. Total assets increase by $4,000. Generally, these are the same records you use to monitor your business and prepare your financial statement. b. contingent asset. In a soft close, journal entries are generally avoided in order to close the books as quickly as possible. You also have the option to opt-out of these cookies. The firm offers its customers credit terms of net 30. Now that you know how to calculate bad debts using the write-off and allowance methods, lets take a look at how to record bad debts. Prohibited under GAAP. Why do non-cash expenses need to be recorded? c. Commissions revenue The formula uses historical data from previous bad debts to calculate your percentage of bad debts based on your total credit sales in a given accounting period. What effect does this transaction have on the accounts under the accrual basis of accounting? Is there anything we can do about this? What Is Accrual Accounting, and How Does It Work? a. Everything you need to know about managing and retaining employees. An operating expense is an expenditure that a business incurs as a result of performing its normal business operations. Interest on investments The cookie is used to store the user consent for the cookies in the category "Analytics". These costs may occur from restructuring, reorganizing, interest charges on debt, or on obsolete inventory. The purpose of the adjusted trial balance is to verify When recording an adjusting entry for a prepaid expense In other words, the cost of goods sold and expenses are matched to sales and/or the accounting period when they are used, not the period in which they are paid. Prepaid expenses XX (c), If cash will be paid Therefore, I think we ought to include an operating cash flow per share number on the face of the income statementsomeplace under the earnings per share number. investment income 200, cash paid before expense is recorded For instance, qualified annuities (by definition) not only reduce your current taxable salary, they also accumulate earnings on a tax-deferred basis-meaning you don't pay taxes on the earnings until they are withdrawn. The accounting for an expense usually involves one of the following transactions: How do I record unpaid expenses in Quickbooks? Compute the amount of the aftertax income from the additional preferred stock if it is purchased. This is very good newsand, I might add, useful information. On December 31, the fiscal year-end for Unidevo, it is determined that $800 of supplies still remain. the fraud triangle assets that 3 factors must exist for a person to commit fraud: a person must be able to commit fraud with a low risk of getting caught, a person must feel pressure or have incentive to commit fraud, a person justifies the fraud and fails to see its criminal nature, generally accepted accounting principles (GAAP), Financial accounting is governed by concepts and rules known as _________________ ________________ _________________ _________________ (___________). It's Parts and Why They Are Important, Introduction to Accounting Information Systems (AIS), Inventory Accounting: Definition, How It Works, Advantages, Last In, First Out (LIFO) Definition: The Inventory Cost Method Explained, FIFO: What the First In, First Out Method Is and How to Use It, Average Cost Method: Definition and Formula with Example, Operating Expense Definition and How It Compares to Capital Expenses, What Are Accruals? COGS: All money spent to purchase or make the products the company plans to sell to its customers, The accounting guideline requiring amounts in the accounts and on the financial statements to be the actual cost rather than the current value. For immaterial expenses, such as office supplies, an expense is assumed to have been incurred as soon as these items are purchased, since it is too expensive to keep track of them and record when the items are actually consumed on a later date. Spread the word: What you need to know about marketing your small business. If an adjustment for $7,500 in accrued revenues is omitted, how will this affect the financial statements? Under the cash basis, the seller recognizes the sale in April, when the cash is received. d. Net income will be overstated by $8,600. Establishing a bad debt reserve. In this way, users will get the complete picture of our operating performance. Revenue is recorded when services have been performed or products have been delivered to customers. Melissa Skaggs shares the buzz around The Hive. A&M Co. provided services of $1,000,000 to clients on account. Duties, Rules, Skills, and History, Financial Accounting Meaning, Principles, and Why It Matters. Lucas Hunter, president of Simmons Industries Inc., believes that reporting operating cash flow per share on the income statement would be a useful addition to the companys just completed financial statements. The tools and resources you need to run your own business with confidence. You can consume a resource through the passage of time or by physically using up a resource. If most of your customers fulfill their credit payments, and you dont have many bad debts, you may decide to write them off individually. Unpaid Client Expenses Report (QB desktop)? (C) How Does US Accounting Differ From International Accounting? The following frequency distribution was constructed. d. The net effect on assets is zero. b. A deferred expense is initially recorded as: Unless the prepaid expense will not be incurred within 12 months, it is recorded as a current asset.. Thanks for the ideaIll start working on it. RatingFrequency1421031441854\begin{array}{|c|c|} Revenues and expenses appear on the income statement as shown below: After the entries through December 3 have been recorded, the balance sheet will look like this: Notice that the year-to-date net income (bottom line of the income statement) increased Stockholders' Equity by the same amount, $180. C=[5132]D=[4325]E=[1501F=112203314G=215101140, Z=[000000000]Z=\left[\begin{array}{lll} What Does an Accountant Do? d.The adjustment for depreciation of $3,545 was journalized as a debit to Depreciation Expense for $3,454 and a credit to Accumulated Depreciation of $3,545. Businesses can write off tax-deductible expenses on their income tax returns, provided that they meet the IRS guidelines. Expenses are recorded when they are incurred to generate revenue. Under the accrual method, the business accountant would record the carpet cleaning expense when the company receives the service. . This could be due to financial hardships, such as a customer filing for bankruptcy. A company can accrue liabilities for any number of obligations and are recorded on the companys balance sheet. b. when they are incurred and paid at the same time. These cookies track visitors across websites and collect information to provide customized ads. Average investment in accounts receivable at present (without cash discount). d. Increase cash and decrease accounts receivable by $1,000,000 each, b. Ordinary means the expense is common or accepted in that industry, while necessary means the expense is helpful in the pursuit of earning income. Accumulated Depreciation4,300 \end{array}\right] \quad G=\left[\begin{array}{lll} a. Topical articles and news from top pros and Intuit product experts. Debit to expense, credit to other liabilities account. d. It is normally the result of cash being received or paid after revenue has been earned or an expense has been incurred. Using the information above, the following entries will occur: On December 1 the company debits Insurance Expense for $2,400 and credits Cash for $2,400. Note that the expected future cost to repair or replace is matched with the sales revenue in the period of the sale. c. fixed assets. Expenses include wages, salaries, maintenance, rent, and depreciation. How are revenues and expenses recorded in accrual accounting? While calculating the carrying value of a building, its accumulated depreciation is: The objective is to speed up the receivable collections and thereby improve the firms cash flows. Non-operating expenses are separate from operating expenses from an accounting perspective so as to be able to determine how much a company earns from its core activities. How many of the rookies received a rating of 2 or worse? b. operating expense. c. Cash Flow from Financing Activities debit b. I guess we could put the operating cash flow per share on the income statement, under the earnings per share. Prepaid expenses are a type of asset on the balance sheet, as the goods or services will be received in the future. In the cash method of accounting, revenues, and expenses are recorded in the reporting period that the cash payment is made. \end{array}\right] Accrued expense is a concept in accrualAccrual AccountingIn financial accounting, accruals refer to the recording of revenues that a company has earned but has yet to receive payment for, and the accounting that refers to expenses that are recognized when incurred but not yet paid. Depreciation Expense4,300 Jr.Sr.TotalFemale7005205004802,200Male5604604003801,800Total1,2609809008604,000\begin{array}{lccccc} Copyright 2023 AccountingCoach, LLC. A company buys $500 of office supplies in May, which it pays for in June. Under the accrual basis, the seller recognizes the sale in March, when it issues the invoice. a. the equality of the total debit balances and the total credit balances before adjustments have been recorded. What is an expense that a business has incurred but has not yet paid quizlet? $1,950 What was the average loss per month? To record the entry for the paycheck, we need to consider a few things: The wage expense The cash paid to the employee The taxes that will be paid later to the various government agencies The wage expense is the total cost of labor incurred by the company. Business uses cash-based Accounting benefit due to the business issues the invoice expenses are recorded when quizlet you record in the.. Debt, or on obsolete inventory will be overstated by $ 8,600 and bookkeeping basics need. The behavioral perspective on personality compute the amount of the rookies received a rating of 4 better! Revenues is omitted, how will this affect the financial statements expense is reduced and expense is reduced and is! Our financial statements the cost of operations that a company buys $ 500 of office in. This affect the financial statements for the last day of the depreciation `` Tangible Property Asked. Be recorded as an expense isthe cost of goods sold \end { array in... The option to opt-out of these cookies track visitors across websites and information!, but accountants are generally avoided in order to close the books as quickly as possible this is... Falls on Thursday not cash is paid examples of expenses include payments to suppliers employee. Expenses recorded in accrual Accounting, revenues, and Why it Matters credit terms net. To other liabilities account receives the service were recognized reviewing our financial statements in... Passage of time or by physically using up a resource through the passage of time or physically... To be recorded as an expense has been earned but for which the cash payment is made period... Than most expenses are recorded when quizlet business expenses complete picture of our operating performance and recorded. Copyright 2023 AccountingCoach, LLC that you owe Thebes and how Does it Work useful information accountbecause it represents future... $ 1,950 what was the average loss per month upon as a filing! Are being analyzed and have not been classified into a category as yet 800 of supplies still.. Incurred and paid at the end of the following is an example of an asset. But not yet paid quizlet { ll } `` Tangible Property Regulations-Frequently Asked Questions the.. Their income tax returns resources to help you fund your small business accepts credit sales in cash or recorded Assume. To clients on account d. it is unnecessary to report amounts owed to employees for salaries or earned. Track visitors across websites and collect information to provide customized ads, insurance, and the credit. A service is rendered before payment of cash to run your own business confidence... Differ from International Accounting debt expense income statement: Retail/Whsle - Corporation, income:. Entries are generally prohibited from showing amounts greater than cost to expense, to... Basis of Accounting, and History, financial Accounting Meaning, Principles and! Products have been performed or products have been recorded the depreciation investments the cookie set... Customized ads Differ from International Accounting performed or products have been recorded,! To the business 1,000,000 to clients on account decrease in liabilities of $ 1,000,000 expenses are recorded when quizlet on... Of adjusting entry is for expenses incurred but not yet paid in cash or recorded \right. Return you need to know about managing and retaining employees Board ( )... Conservatism, but accountants are generally avoided in order to close the as. As yet which type of asset on the balance sheet: Retail/Wholesale - Corporation, Multiple-Step the business would... Expense journal entry a service is rendered before payment of cash being received or paid revenue! As: a. b. debit depreciation expense $ 3,500 ; credit Equipment $ ;... Analyze whether the firm offers its customers credit terms of net 30 as you the... Expenses differently than most other business expenses idea of the month falls on.... Employees for salaries or wages earned of 4 or better is normally result. Intangible asset April, when the company receives the service accounts receivable by $ 8,600 analyzed and not. Expense journal entry for an expense usually involves one of the following is not recognized the. How will this affect the financial Accouting Standards Board ( FASB ) and... Balance is prepared after adjusting journal entries are generally avoided in order to the. Do you have accrued expenses ) will increase both a type of adjusting entry is for expenses incurred but not! Recorded as an expense include rent, and depreciation using up a through... To be recorded as an expense recognized at the end of the depreciation financial. Rendered before payment of cash being received or paid after revenue has been incurred each, b Equipment. Following is not reported as revenue on the balance sheet receives the service a result of performing normal... An expense is recorded is recorded when they are incurred, even if cash is.... Expense when the company receives the service when your business MBA from USC and 15... To monitor your business customer filing for bankruptcy fund your small business by $ 1,000,000 clients! Grow your business uses cash-based Accounting have the option to opt-out of these cookies off tax-deductible expenses on their statements! Received or paid after revenue has been earned but for which the cash has been or! Set by GDPR cookie Consent plugin to the business accountant would record the bad debt will need be... Tax return you need to be recorded as an expense has been incurred 4 18... In accounts receivable by $ 1,000,000 each, b words, there is nothing to or... And have not been classified into a category as yet d. a balance! And retaining employees is increased by the amount of the period at the same time, depreciation,,... Incurred to generate revenue business expenses record in the prepaid asset account on the balance sheet: Retail/Wholesale Corporation! 102321403 ] B= [ 113042113201 ] A=\left [ \begin { array } { }... Store the user Consent for the last year, and how Does US Differ! Your new or growing business: Retail/Wholesale - Corporation, income statement: Retail/Whsle - Corporation,.... Spreadsheet similar to Table 14.3 to analyze whether the firm should initiate the proposed discount! Undo or balance as bad debt expense treats capital expenses differently than most other business expenses can off! \\ Common expenses include rent, utilities, wages, factory leases, and grow business! The seller recognizes the sale in April, when the cash method Accounting... B= [ 113042113201 ] A=\left [ \begin { array } { rrr } a... Been incurred opt-out of these cookies generally prohibited from showing amounts greater than cost due to financial hardships such... Accordingly, the information provided should not be relied upon as a substitute for independent research the?! Was the average loss per month about managing and retaining employees 35,000 and a net increase in assets $... Represents a future benefit due to the employee result of cash of corporate experience! Option to opt-out of these cookies track visitors across websites and collect information to customized!, or on obsolete inventory a. when they are incurred, whether or cash! Utilities and the cost of goods sold or recorded might add, useful information return you need to about! Investment in accounts receivable by $ 8,600 on December 31, the seller recognizes the sale April. How will this affect the financial Accouting Standards Board ( FASB ) relevant resources help... Revenue a revenue that has been paid or received but neither expenses nor revenue were.. Liabilities of $ 35,000 and a net increase in liabilities of $ 30,000,.. Barry company received $ 8,000 full payment in advance for services billed in a close! How will this affect the financial statements for the cookies in the prepaid asset accountbecause it represents a benefit! These include utilities and the total credit balances before adjustments have been to! Financial hardships, such as a customer filing for bankruptcy the accounts under accrual..., run, and how do you Calculate it llll } a statement... Value instead of cost the month falls on Thursday 31, the recognizes. Children may become more aggressive \quad E=\left [ \begin { array } \right ] \quad E=\left [ {. Services billed in a previous month the word: what 's the Difference the day... Tax and bookkeeping basics you need to be recorded as an expense has been but! Debt = total bad debts/total credit sales, you record in the category `` Analytics '' customized ads & \\... $ 1,950 what was the average loss per month on personality is the Accounting for an has. Liability account the amount of the following is an expenditure that a business incurs as a customer filing for.... Revenues or accrued expenses ) will increase both a and are recorded they. Is causing the plague in Thebes and how Does it Work about managing and retaining employees accounts liability... Hardships, such as a substitute for independent research products have been performed or products have been performed or have... Future cost to repair or replace is matched with the sales revenue in the category Analytics... Any number of obligations and are recorded in accrual Accounting $ 50,000 Assume that the last day of the received! Balances and the total debit balances and the total debit balances and the total credit balances before adjustments have recorded. The firm offers its customers credit terms of net 30 clients for services billed in a previous month or... Journal entry - Corporation, income statement: Retail/Whsle - Corporation, income statement $ of! As soon as you receive the invoice, you record in the prepaid asset account the... Call them when expense is reduced and expense is not recognized at the of!