Also known as a journal.
Also known as a journal.
A book of original entry that requires that both the account being debited and the account being credited be listed along with the respective amounts. Because of accounting software and special journals there are...
What is a journal? Author: Harold Averkamp, CPA, MBA Definition of a Journal In accounting and bookkeeping, a journal is a record of financial transactions in order by date. Traditionally, a journal has been defined as...
The record of journal entries appearing in order by date. Some refer to the journal as the book of original entry, since the entries are first recorded in a journal. From the journal the entries will be posted to the...
What is the difference between entries in a general journal versus a general ledger? Author: Harold Averkamp, CPA, MBA Definition of General Journal The general journal is described as the book of original entry. Today...
. Credit Right! 8. Revenue accounts will normally have __________ balances. Debit Wrong. Credit Right! 9. The bookkeeping or accounting equation is Assets = Liabilities + Owner's __________ Equity. 10. The book of...
is recorded as a gain. If the cash received is less than the asset’s book value, the difference is recorded as a loss. Example of a Gain on the Sale of an Asset On March 31, a company sells its old delivery van for...
be depreciated over five years with equal amounts each year; however, the computer's value after one year may be only half of its cost. 3. Depreciation Expense reflects an allocation of an asset's original...
the fixture’s book value at the beginning of the year instead of the fixture’s original cost. At the beginning of the first year, the fixture’s book value is $100,000 since the fixtures have not yet had any...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
The depreciation computed for financial reporting purposes—as opposed to income tax depreciation. To learn more, see Explanation of Depreciation.
The amount of owner’s equity or stockholders’ equity reported on a company’s balance sheet. This is not an indication of the company’s fair market value.
What is book value? Author: Harold Averkamp, CPA, MBA Definition of Book Value In accounting, book value refers to the amounts contained in the company’s general ledger accounts (or books). It is important to realize...
The book value of an asset is the asset’s cost minus the accumulated depreciation since the asset was acquired. This net amount is not an indication of the asset’s fair market value. The book value of an...
The book value of an asset is the amount of cost in its asset account less the accumulated depreciation applicable to the asset. The book value of a company is the amount of owner’s or stockholders’ equity....
Same as book value. For example, an asset’s net book value is equal to the asset’s cost minus its accumulated depreciation.
The balance in a business record such as a general ledger account.
What is the book value per share of stock? Author: Harold Averkamp, CPA, MBA Definition of Book Value per Share of Stock The book value of a corporation is the amount of its stockholders’ equity. Assuming the...
How do you record a check that clears the bank months after it was voided? Author: Harold Averkamp, CPA, MBA Since you had voided the check months earlier, your general ledger no longer reflects 1) the original credit...
". For items 4-15, select the action necessary to reconcile the bank statement. 4. Outstanding checks. Add To BOOK Balance Wrong. Checks that have been written are already recorded on the books. Deduct From BOOK...
What is a journal entry? Author: Harold Averkamp, CPA, MBA Definition of a Journal Entry In manual accounting or bookkeeping systems, business transactions are first recorded in a journal…hence the term journal entry....
The journal entry recorded in the general journal (as opposed to the sales journal, cash journal, etc.).
The 500 year-old accounting system where every transaction is recorded into at least two accounts. To learn more, see Explanation of Debits and Credits.
A journal entry with more than the minimum of one debit and one credit. Example: a debit to Cash of $500 and a credit to Sales of $475 and a credit to Sales Tax Payable of $25.
The entry made in a journal. It will contain the date, the account name and amount to be debited, and the account name and amount to be credited. Each journal entry must have the dollars of debits equal to the dollars of...
What is a memorandum entry? Author: Harold Averkamp, CPA, MBA Definition of Memorandum Entry A memorandum entry is a short message entered into the general journal and also entered into a general ledger account. It is...
A journal entry made on the first day of a new accounting period to undo the accrual type adjusting entries made prior to the preparation of the financial statements dated one day earlier. Reversing entries allow for an...
An accounting entry with only one account being debited and only one account being credited.
A journal entry to correct an erroneous amount previously entered in the general ledger.
An entry without debit or credit amounts. For example, assume that a corporation has 100,000 shares of $0.50 par value common stock before a 2-for-1 stock split. At the time of the split a memo entry would be entered in...
Our Explanation of Improving Profits will assist you in focusing on the costs and revenues that are relevant (and ignoring those which are not relevant) for improving profits and eliminating losses. Examples of the...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
of the balance sheet. By crediting Accumulated Depreciation (instead of crediting the asset account which has the asset’s original cost), it allows for the balance sheet to report or disclose the following: The...
A term to mean the company’s general ledger or accounting records.
accounts receivable, it should prepare an adjusting entry that debits Bad Debts Expense and credits Allowance for Doubtful Accounts. If a company does not make a needed credit entry to the Allowance account, the...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
What is the double-entry system? Author: Harold Averkamp, CPA, MBA Definition of Double-Entry System The double-entry system of accounting or bookkeeping means that for every business transaction, amounts must be...
What is double-entry bookkeeping? Author: Harold Averkamp, CPA, MBA Definition of Double-Entry Bookkeeping Double-entry bookkeeping refers to the 500-year-old system in which each financial transaction of a company is...
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