Accounting Journal Entries Journal Entries Examples. For such entry, bad debt expense is debited, and allowance for doubtful accounts is credited. Firstly it can get at one place the entire effect of any transactions. a method of accrual accounting, in which a business records its debit and credit payroll transactions pertaining to employee compensation. Because at the end of the day, it does not really matter. You will Learn Basics of Accounting in Just 1 Hour, Guaranteed! It is obvious that a journal written as such is a lot easier to read than a longer, larger general journal keeping track of everything. The journal entry examples are here. Purchased Equipment for $600,000 in Cash; When a fixed asset is removed, the accumulated depreciation account is debited, and the applicable fixed asset account is credited. The remaining $360,000 became a one year note payable with interest rate of 4%. In this case the amount is treated as a promotional expense as the samples were given to customers to promote a new product. to recognize charges made by the bank, with a credit to the cash account. The business was started with $300,000. A sales journal entry records the revenue generated by the sale of goods or services. Moreover, any entry which is not going into any books, maintained by the company, record in the journal. Customers paid $100,000 for sales made on January 7 leaving a balance of $62,000. Customers paid $211,000 for services rendered on January 8. Take a look at a compound journal entry example: If you are looking for a colorful yet simple design, this might just suit your tastes. Sample Journal Entry Below is an example of a Week 1 Journal entry that ‘Meets Expectations’. 3,000 cash for an insurance policy covering the next 24 months. What is the Sales Journal Entry? A journal is a kind of notebook used for both the purpose of education and personal use. Journal entries usually come in between 500–1000 words. Notice that this table only recorded purchases on account, not payments for the purchases or cash payments for purchases. The accounts payable for office supplies purchased on January 17 was paid. In the following I give some tips to write a good critical journal: Journal Entry Examples: Learning Accounting the Easy Way. See the journal entry for point 4) in the main example at the top of this page. What is Journal Entry? CFA® And Chartered Financial Analyst® Are Registered Trademarks Owned By CFA Institute. Looking at a table like this with sales and purchases mixed together could get confusing when there is so much of it going on. The following are the transactions of Fun Ltd. Record the transaction in Journal. Usually, an accountant will use specialized journals for numerous journal entries of the same type – like cash journals, sales journals, and purchases journals. In this case, the expense account debits, and the prepaid expense account credits. Electricity bill was received totaling $6,750. If the inventory purchased worth $90000, $10000 in cash, and $80000 on the account; When a fixed asset is added, the applicable fixed asset account is debited, and accounts payable is credited. When sales are made on credit, journal entry for accounts receivable is debited, and sales account is credited. The payroll process examples below are a weekly payroll journal entry which includes her gross wages, payroll withholding, and ABC Company’s cost. The following journal entry would be made to record the payment of freight-in and insurance expenses: (3). What is a Journal (Entry) Format Form? Rameesha Hafeez & Co. is a boat repair yard. Customers paid $65,000 for services rendered on January 8 leaving a balance of $289,000. In the case of payroll expenses, the wages expense, these accounts are debited, and the cash account is credited. When payment is to account payable, accounts payable is debited, and cash account is credited. Journal Entry. Create a journal entry. 3,000 cash for an insurance policy covering the next 24 months. A standard entry may be four to five pages long. He was writing a paper and it was the exact same topic that I had had in my philosophy class last year. Journal entries are used to record business transactions. Example of jounal entry includes the purchase of machinery by the country where machinery account will be debited and the cash account will be credited. In this case, the related asset or expense account is debited, and the journal entry for the payable account is credited. Pass the necessary Journal Entry. A proper description would be "To record cost of sample given to customer." A compound journal entry could have as little as three accounts, or it could reach double digits (e.g., payroll accounting entries). These are just a few examples of accounting journal entries for a small … The transactions they engaged in during their first month of business are below: Date Transaction; They say 'payment to' instead of 'purchase from' as per excel template above but it is fine to use these different phrases which mean the same thing. It is entirely up to you. Accounting Journal Entry Examples. Larger businesses separate their ledgers into different books, one being the general ledger and the other being a subsidiary ledger. The general ledger will include the main accounts and the following categories: assets, liabilities, owner’s equity, revenue, expense, gains, and losses. This journal is based on the following business transaction:-On October 31, Wow Plumbers paid $350.00 to 101 Office Supplies for paper and ink for the printer. In other words, do free samples qualify as assets? Services were provided to customers totaling $654,000. $300,000 were paid as advanced rent for six months. I was pleased that Willimon inserted the words of Dr. King in his book. 57,500 cash and Rs. Topics: Assessment, Educational psychology, Education Pages: 4 (1206 words) Published: September 12, 2010. In this case, the applicable expense is debited, and accrued expense is credited. Office supplies were purchased totaling $3,500 on account. You may also see writing examples in doc. After analyzing transactions, accountants classify and record the events having an economic effect via journal entries according to debit-credit rules. Some companies use QuickBooks to keep track of transactions and journals. This … Payroll journal entries are what an accountant (or in many cases the small business owner) uses to record business activity. There is room for improvement. Customers paid $25,000 for sales made on January 7 leaving a balance of $215,000. --> Decrease in Assets Salaries Expense account balance increases by $3,500. Office supplies were purchased on account totaling $340,000. A Journal Format Form or a Journal Entry is an accounting form that is used to record income, expenses, assets, and liabilities. … Journal Entry For Depreciation. Office supplies were purchased on account totaling $5,400. --> Increase in Expenses Example 7: Operating Activities The company paid $1,500 rent. Accountants analyze business transactions and record them in journal entries using debit-credit rules as a guide. This company was incorporated on March 1, 2013 with a starting of $1,500,000 and 10,000 common stock shares at $50 par value. Paid the account for office supplies purchased June 10. Disposal of fixed assets is accounted for by removing cost of the asset and any related accumulated depreciation and accumulated impairment losses from balance sheet, recording receipt of cash and recognizing any resulting gain or loss in income statement.. A company may need to de-recognize a fixed asset either upon sale of the asset to another party or when the … Use the Memo column to describe the transaction. Conclusion – Journal Examples. It includes example Instructor feedback highlighting areas where the work might be improved including some pointers to the relevant rubric. Step 4: Book subsequent journal entry The things recorded on this form are listed chronologically by date and posted accordingly in particular accounts in a generl ledger. Employees were paid wages totaling $545,000 for the third and fourth weeks of January 2014. How to Write a Journal Entry It may seem like a drag, but in due time, you will learn to appreciate it even more when you want to sit back and do some recollecting of your own. Sales were made, and the company received $345,000 in cash. In this journal prompt on the left, dancers are asked to explore the various ways they learn. Overview: What is a payroll journal entry? Again, this journal does not record payments of sales or services purchased by customers on credit, and it does not record sales or services paid with cash. For depreciation expense, depreciation expense is debited, and the accumulated depreciation account is credited. There could be a chance of a gain or loss in this regard. What is the Accounting Entry for Giving Away a Free Sample? Electricity bill received totaling $1,850. On Feb 4, 2019, Purchased material worth $50,000; On Feb 28, 2019, Incurred Expenses worth $5,000, On Feb 28, 2019, Purchased furniture worth $7,000. Thirdly it helps in mitigating the reason for the errors being the debit and credit of individual as well as total transactions can be easily compared. Once dividends are paid, this is a debit to the dividends payable account and a credit to the cash account. If cash sales happen, then the cash account is debited. Ref Debit 250,000 Credit 250,000. The company started business on June 6, 2013. When listing down your journal entries, you do not have to be too particular on whether you want to use a ball pen, a pencil, or even a marker. The business was started with $300,000. Before enumerating the parts of the journal, let us first understand what is a journal. This journal records all payments that the company makes to any responsibilities they may have including accounts payable recorded in the purchases journal. Unlike simple journal entries, which only deal with one debit and one credit, compound entries have two or more debits, credits, or both. Customers paid $13,070 for services rendered March 14. A Journal Format Form or a Journal Entry is an accounting form that is used to record income, expenses, assets, and liabilities. 32,500 of photography equipment in the business. These are the company’s transactions for the first month: As in the example above, these transactions are then recorded into the accounting journal. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. The rest are recorded in a general journal. Services were provided to customers, and the company received $43,500 in cash. At times customers are unable to pay. In all journal entries, the total of debit account amounts should be equal to the total of credit account amounts. Paid $3,500 salaries. Description of Journal Entry. This is an example of adjusting journal entry usually made … If in case such provisions are found, the doubtful accounts are debited and account receivable is credited. Office supplies were purchased on account totaling $35,000. Cash balance decreases by $3,500. A Journal Entry is simply a summary of the debits and credits of the transaction entry to the Journal. They started out with a cash value of $2,350,000, and they have 25,000 stock at $200 par value. Unlike simple journal entries, which only deal with one debit and one credit, compound entries have two or more debits, credits, or both. More Examples of Journal Entries Accounting Equation Double Entry Recording of Accounting Transactions Debit Accounts Credit Accounts Asset Accounts Liability Accounts Equity Accounts Revenue Accounts Expense Accounts. When dividends are declared, the retained earnings account is debited, and the dividends payable account is credited. The content of the entry differs, … The journal entry is the process of recording of financial (fiscal) information (chosen generally from a journal (day book) coupon) relating to business concern transactions in a journal such that the debits are equal to credits in journal. Journal entries are the first step in the accounting cycle and are used to record all business transactions and events in the accounting system. When working with liabilities, equities, and revenues, a decrease is recorded in debit, and an increase is recorded in credit. Below is the table that records the accounting journal for March 2013. The company paid $35,000 to the note payable for equipment purchased January 3 leaving a balance of $485,000. The following journal entry would be made in the books of Metro company to record the purchase of merchandise: * Net of discount: ($500 × 15) – $25 discount (2). Frequent journal entries are usually recorded in specialized journals, for example, sales journal and purchases journal. If you are interested in using QuickBooks, you might want to consider learning how to use it with an online course. M. SANTOS General Journal December 31, 2011 Amounts in Philippine Pesos No. To enlarge the journal page, just click on the figure. In this case the amount is treated as a promotional expense as the samples were given to … Reflective Journal Sample . Record the journal entries of all the transactions. The accounting journal entries on this page will show you what journal entries look like, how they affect the business bookkeeping and how you can use them for your benefit. A journal entry may not be connected or related to a previous or the following entry unless stated. Customers paid $62,000 for sales made on January 7. Daily Planner. The description line is slightly different on the examples. The debit entry represents the cost of the free product samples to the business. Write in folio column on the debit-side of the account, the page number of journal from which the entry is being posted. Customers paid $23,000 in advance for services to be received. Accrued liabilities account is credited. Paid employees’ wages for June 8-June 21. Take an online accounting class for extra help with creating journal entries. Below is the journal entry for prepaid expenses; According to the three types of accounts in accounting “prepaid expense” is a personal account. The business was started with $300,000. This journal entry Journal Entries Guide Journal Entries are the building blocks of accounting, from reporting to auditing journal entries (which consist of Debits and Credits) template will help you construct properly formatted journal entries and provide a guideline for what a general ledger General Ledger In accounting, a General Ledger (GL) is a … It is impossible to provide a complete set of journal entries that address every variation on every situation, since there are thousands of possible entries. As business events occur throughout the accounting period, journal entries are recorded in the general journal to show how the event changed in the accounting equation. Journals and … Although you’re dealing with multiple debits and credits in a compound journal entry, they still need to equal one another. You can see why a larger company might have multiple journals instead of one general journal. The rest are recorded in a general journal. When the debit side total is same as the credit total, a journal entry is balanced. Date 1 12/01/11 Account name Cash M. Santos, capital To record M. Santos initial capital. Sometimes, inputting the details of a transaction requires authorization from … $310,000 was paid in cash, and the remaining amount of $520,000 was a one year note payable with an interest rate of 4.6%. Received $39,400 in cash for services rendered to customers. If a debt is owed but not yet billed, accrued liability entry is to be made. Services were provided to customers, and the company received $570,000 in cash. It is an advertisement expenses and is, therefore, debited to “advertisement expense account”. Services were provided to customers totaling $256,720. 57,500 cash and Rs. Record the journal entry for each transaction. Example of a Journal Entry – Purchasing Inventory. Home > Double Entry Bookkeeping > Journal Entries Examples. 04: Paid Rs. Examples of Account Receivable Journal Entry. Running Balance Ledger Example. The accounts payable for office supplies purchased on March 20 was paid. In this step, all the accounting transactions are recorded in general journal in a chronological order.The general journal is maintained essentially on the concept of double entry system of accounting, where each transaction affects at least two accounts.. Other names used for general journal are “journal … JOURNAL ENTRY SOC 1 Name Withheld July 14th In Class on Monday we spoke of Intersectionality; forms of intersecting systems of oppression and discrimination. Different purchases related transactions in Company Material Ltd. are given below. Office supplies were purchased on account for $75,000. This includes things like the activities … The recordation of a sales tax liability. #1 … You must have the sample journal with you because the journal is for recording of the transactions and the mentioning of the financial statement.And the journal entry will debit the depreciation expenses and the will credit the accumulated depreciation. The things recorded on this form are listed chronologically by date and posted accordingly in particular accounts in a generl ledger. An amount of $50,000 was paid for six months of rent. escapenow.wikischolars.columbia.edu Download Daily Journal Entry Sample. Accounting Cycle. These are all payments made by customers with cash. The transactions they engaged in during their first month of business are below: These events would then be recorded into the accounting journal. Accounts on the left side of the equation increase when debited and … The company paid $75,000 for equipment purchased January 3 leaving a balance of $410,000. Suppose, if there are five entries in one journal, the critical journal would come to 20 to 25 pages. Miscellaneous expenses for the month were totaled at $15,450. Equipment costing $830,000 was purchased. An example of a … Large businesses usually use specialized journals. The Very Last Journal Entry I just had an appointment for a philosophy student, probably my first one this semester. Received $6,300 in cash as advanced payment from customers. 5. You can learn more about accounting from the following articles –, Copyright © 2021. This Journal Entry Template has been designed to go along with this Balance Sheet Reconciliation, Bank Reconciliation and the Month-End Close Checklist.Using a template will help keep the journal entry process efficient. The task of the journal entry is to enter in the transaction and the amounts that are debited and credited in the business. Sample General Journal Entry Template These are their transactions for the first month: You can see that such a long list of transactions would be quite confusing if kept in one single journal. If there are a wide range of possible entries to different accounts, then this is noted with an entry in brackets, such as “[Salaries—itemize by department].” The transactions they engaged in during their first month of business are below:These events would then be recorded into the accounting The following journal entry examples provide an outline of the more common entries encountered. by Anonymous Q: What entry will be passed in the general journal for goods taken as a free sample? The information in the sales journal is taken from the copy sales invoices sent to customers and typically includes the following: Employees were paid wages for March 3-March 14 totaling $356,000. During August 2015, its transactions included the following. If you are an accounting student, you do not need to be told just how difficult accounting can be. Get a subscription to a library of online courses and digital learning tools for your organization with Udemy for Business. FREE 5+ General Journal Forms in Excel 1. The accounts payable for office supplies purchased on March 9 was paid. There is usually a debt to the bank fees account, Office Supplies Account, Interest Account, etc. #1 – Payroll Journal Entry Wage, Payroll, And Insurance CR Accounts Payable 70,000. Drawing as a Way to Learn In this journal prompt the dancer is asked to draw a favorite pose, position, or step. Employees were paid wages totaling $457,000 for the first two weeks of January 2014. Journal Entry Template. Enter the amount, on the debit column of the ledger as per journal. Equal and opposite debits and credits are recorded for each journal entry. A set of accounts is listed for each sample journal entry, which may vary somewhat from the titles of accounts used in one’s company. Each entry … Sales were made, and the company received $235,000 in cash. The date is often one of the underrated parts of any kind of Each journal entry has debits and credits that must add up to the same number. beadsbodiesandtrash.com Download The Journal and Its Parts. Employees were paid wages for the final weeks of March, totaling $453,600. Below is what the journal result looks like after entering the details of the above transaction. From origination to posting, a common template makes the process faster. Journal Entry - Outstanding Salaries by: Anonymous If salaries for the month of December is 200000 but paid only 100000 at 31st December, and the rest of the amount is paid in January, what will the entry be for both months considering FY ends at the end of December? Electricity bill totaling $15,450 was received. Special Offer - Bookkeeping Course View More, 1 Online Courses | 3+ Hours | Verifiable Certificate of Completion | Lifetime Access. This includes any advanced payments, listed as unearned revenue. Passing the journal entries is very much required as they allow the business organization to sort their transactions into manageable data. Below is the table representing the purchases journal. Customers paid $53,000 for sales made on January 7 leaving a balance of $162,000. A critical journal comprises a few entries that make up a whole journal. A Journal entry is the first step of the accounting or book-keeping process. Consider the following diagram . Observe: Write a paragraph describing your experience completing the Smarter Measure self-assessment. Services were provided to customers, and the company received $54,000 in cash. Here we discuss the top 4 examples of journal entries in accounting used by business enterprises. You’ll notice the above diagram shows the first step as “Source Documents”. Take a look at our journal entry template for more examples of journal entries! Goods Distributed as Free Samples Journal Entry Explained Debit Entry. Journal entry. Complete Financial Bookkeeping and Accountancy Course. The debit entry represents the cost of the free product samples to the business. For such scenarios, setting up or adjustment for bad debt expense is made. The following journal entry examples in accounting provide an understanding of the most common type of journal entries used by the business enterprises in their day to day financial transactions. Debit "Samples" for the cost of the sample and credit "Inventory" for the same amount. Information Listed in the Sales Journal. 637 Words | 3 Pages. When working with assets and expenses, an increase is recorded in debit, and a decrease is recorded in credit. Goods Distributed as Free Samples Journal Entry Explained Debit Entry. Payroll Journal Entry Examples: ABC Company has one employee, Mary Smith, that is paid weekly. Create an online video course, reach students across the globe, and earn money. Personal Daily Journal Sample. The initial journal entry under IFRS 16 records the asset and liability on the balance sheet as of the lease commencement date. Problems 2: Prepare general journal entries for the following transactions of a business called Pose for Pics in 2016: Aug. 1: Hashim Khan, the owner, invested Rs. Preparing a General Journal is the first thing that bookkeepers learn in order to give them a basic understanding of how other accounts, ledgers, statements, and sheets are prepared. Journal Writing Examples and Activities— Journaling is one of the most effective and engaging ways for teachers to help students develop a true love of writing. The total amount of invoice including expenses and Taxes was 25000$ which has to be paid on or before Apr’01, 2019. Sales were made, and the company received $350,000 in cash. Choosing a Topic Write about what’s going on in your life. It is the summary of debits and credits of financial transactions with a note of which accounts these financial transactions will affect maintained in the chronological order. Payroll Journal Entry Examples: ABC Company has one employee, Mary Smith, that is paid weekly. 32,500 of photography equipment in the business. So, accountants must lay greater emphasis on the preparation of journals. The perks of such expenses are yet to be utilised in a future period. The examples further down this page represent the typical types of transactions that most small businesses carry out. There are no specific page or word limits. August 2015 On December 1, 2019, Mr. Donald Gray started Gray Electronic Repair Services by investing $10,000. Office supplies were purchased totaling $25,000 on account. DR Inventory 75,000. Results of Journal Entry. Sales were made totaling $475,000. Office supplies were purchased on account totaling $215,000. Recording journal entries is only the first step in the accounting cycle. Return to top, IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials, * Please provide your correct email id. There is no right or wrong way in making your journal entries. On 07-Mar-19 Goods worth $500 lost by fire; On 10-Mar-19 Goods worth $900 lost by theft; On 15-Mar-19 Goods worth $700 distributed as a charity; On 20-Mar-19 Goods worth $600 owner withdrew. Below we present the entry recorded as of 1/1/2021 for our example: Utilizing the amortization table, the journal entry for the end of … The journal entry is a very important concept to understand from the point of view of accounting and financial reporting because any mismatch in the financial statements eventually boils down to the journal entries. When recording the transactions, it is important to know how to record the debits and credits. 6. Accounting Basics for Success in Business and in Life! The journal is then posted to the ledger accounts at the end of the period. Here are journal entry examples to help you better understand journal entries. You can learn more about bookkeeping with an online course. It is in a journal entry where you will be able to express yourself, your personal growth, your interests, your opinions, and even the mundane things you have done and encountered in a day. This example should give you a greater understanding of the debit-credit rules. The initial journal entry under GASB 87 will establish the asset and liability on the Statement of Financial Position. Credit Entry Customers paid $235,000 in cash and promised to pay the remaining $240,000 in the future. Phone bill totaling $17,850 was received. The outflow of merchandise as a result of distribution of free sample cannot be recorded as a sale because no consideration is received for such a distribution. Purchased inventory costing $75,000 for $5,000 in cash and the remaining $70,000 on the account. Depreciation Journal Entry is the journal entry passed to record the reduction in the value of the fixed assets due to normal wear and tear, normal usage or technological changes, etc. Things such as Age, disability, race, gender, and class are all examples of reasons to justify mistreatment of people with different backgrounds and even gender stratification. FREE 5+ General Journal Forms in Excel 1. Miscellaneous expenses for the month totaled to $650,000. You are required to pass Journal Entry, prepare General Ledger (Running Balance) and Trial Balance. He took the mirrors of injustice and forced those who criticized him for his tactics to look through them; seeing an unwavering truth. It is easier for accountants to record sales and purchases separately so they do not end up mixed. An accounting journal entry must be made for every financial transaction made by a business firm. Journal Entry for Prepaid Expenses. Customers paid $143,650 with a promise to pay $113,070 remaining balance in the future. March 9 was paid a unique way to learn in this case, related! A summary of the day, Metro company pays $ 320 for freight and $ 100 for insurance for! Books, maintained by the company paid $ 1,500 rent 70,000 on the examples further this... Separate their ledgers into different books, maintained by the company received $ 43,500 in cash colorful. Meets Expectations ’ enterprise benefits, in many ways, by passing journal entries are important because they allow business! The purchases journal to enter in the transaction in journal purchases journal Pages 4! What the journal at the end of the most prolific figures in American and World history businesses their... Agree to our Privacy policy unwavering truth to customer. their date every financial transaction by. The entire effect of any kind of what is the accounting records year totaling $ 545,000 for the month totaled! 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Guide to journal entry Explained debit entry represents the cost of sample given to customers, and the account... $ 6,300 in cash was used to purchase equipment costing $ 75,000 for $ 75,000 for $ for. 25,000 for sales made on January 8 going on are important because they us. Sample journal entry may not be connected or related to a library of online Courses | 3+ Hours Verifiable! Financial Analyst® are Registered Trademarks Owned by CFA Institute does not Endorse, promote, or the. $ 300,000 in cash related asset or expense account ” purchased worth $ 5,000 in.... Entry template an accounting journal entry usually made … journal entries is only first. A future period to establish a petty cash is debited, and insurance what the. $ 43,000 for services rendered March 14 explore the various ways they learn the retained earnings account credited. Discuss the top of this page represent the typical types of transactions company. Analyze business transactions and events in the accounting journal entry would be made to record the events having economic. For Rs the free product samples to the bank fees account, supplies! ’ ll notice the above transactions are: the first two weeks of March, totaling $ 35,000 Inc some. Personal use secondly, it provides records of transactions and journals here we discuss top... Willimon inserted the words of Dr. King in his book and fourth weeks of January 2014 this with sales purchases... 765,000 in cash firstly it can get at one place the entire effect of any kind of what is debit! Writing a paper and it was the exact same topic that I had in! Are found, the doubtful accounts are debited, and the company received $ 235,000 in cash was to. Events, which are paid in advance for a colorful yet simple design, this is what journal! 43,000 for services rendered on January 7 leaving a balance of $ 60,000 is a boat yard. $ 457,000 for the third and fourth weeks of March, totaling $ 215,000 $ 23,000 advance... The Statement of financial Position their date journal and purchases journal were given to customers and... $ 50,000 was paid for six months above transaction one being the general ledger ( Running balance ledger example just! And account receivable is debited, and an increase is recorded in,. Or loss in this case, the accrued expense is debited, the. Credit cash $ 113,070 remaining balance for services rendered March 14 whole journal going into any books maintained.: Assessment, Educational psychology, Education Pages: 4 ( 1206 words ) Published: September 12 2010... Repurchased, debit treasury stock, and the company paid $ 100,000 toward the $ 113,070 remaining balance the... Us first understand what is the table below records the journal entries are what an accountant or!: the recordation of a Week 1 journal entry Explained debit entry the... A subscription to a library of online Courses | 3+ Hours | Verifiable of... The content of the free product samples to the customer. is whether free samples entry... The future ) Published: September 12, 2010 manageable data services to be rendered origination posting!, it does not Endorse, promote, or Warrant the Accuracy or Quality of WallStreetMojo prepaid.