Questions & Answers (Q&A)

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Harold Averkamp, CPA, MBA

All 1036 questions have been answered personally by Harold Averkamp, CPA, MBA. Harold is the sole-author of all the instructional content found on AccountingCoach.com.
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Q&A Archive

What is the difference between revenues and receipts?

A company's revenues are amounts it has earned as the result of business activities such as selling merchandise or performing services. Under the accrual method of accounting, revenues are reported on the income statement in the period in which they are earned… Read More.

What is the maximum amount of earnings subject to the Social Security tax in 2015?

The maximum amount of an employee's 2015 earnings (and a self-employed person's net income) that is subject to the Social Security tax is $118,500. This amount is also known as the Social Security annual limit, wage base, contribution and benefit base, ceiling,… Read More.

What is the self-employed person's FICA tax rate for 2015?

The self-employed person's FICA tax rate for 2015 is 15.3% on the first $118,500 of net income and then 2.9% on the net income that is in excess of $118,500. The self-employed person's FICA tax rate for 2015 consists of the following:… Read More.

What is an ordinary annuity?

In accounting, an ordinary annuity refers to a series of identical cash amounts with each amount occurring at the end of equal time intervals. An example of an ordinary annuity is the series of semiannual interest payments that are part of a… Read More.

What is premium on bonds payable?

Premium on bonds payable (or bond premium) occurs when bonds payable are issued for an amount greater than their face or maturity amount. This is caused by the bonds having a stated interest rate that is higher than the market interest rate… Read More.

What is the IRS mileage rate for use of a car in business in 2015?

The optional standard rate allowed by the Internal Revenue Service for the business use of a car in the year 2015 is 57.5 cents per mile. (This compares to 56 cents per mile in the year 2014.) In addition to the 57.5… Read More.

What is the employer's Social Security tax rate for 2015?

The employer's Social Security tax rate for 2015 is 6.2% of each employee's first $118,500 of wages, salaries, etc. If an employee has wages, salaries, etc. that are greater than $118,500, the amount in excess of $118,500 is not subject to the… Read More.

What is the employee's Social Security tax rate for 2015?

The employee's Social Security tax rate for 2015 is 6.2% of the first $118,500 of wages, salaries, etc. An employee's 2015 earnings that are in excess of $118,500 are not subject to the Social Security tax. The Social Security tax is one… Read More.

What is the stated interest rate of a bond payable?

The stated interest rate of a bond payable is the annual interest rate that is printed on the face of the bond. The stated interest rate multiplied by the bond's face amount (or par amount) results in the annual amount of interest… Read More.

What are operating expenses?

Operating expenses are the costs associated with a company's main operating activities and which are reported on its income statement. For example, a retailer's main operating activities are the buying and selling of merchandise or goods. Therefore, its operating expenses will include:… Read More.