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...
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...
split is a memo entry to note that the number of shares has changed and that the par value per share has changed (if the stock has a par value). However, a typical journal entry (one with a debit and a credit) is not...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
will then issue a credit memo for $8. The credit memo will result in the following entry in SellerCorp’s accounting records: 1) a debit of $8 to Sales Returns and Allowances, and 2) a credit of $8 to Accounts...
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
A document issued to a customer by a seller which reduces the seller’s accounts receivable and its net sales. It also reduces the buyer’s accounts payable and net purchases. A document issued by a bank that...
a debit memo of $25 for a service charge, it means that the company’s general ledger Cash account will need an entry that credits Cash for $25, and debits Bank Fee Expense or Miscellaneous Expense for $25. (The...
Bank Reconciliation Author: Harold Averkamp, CPA, MBA 43 Q&A Popular Recent What is a bank reconciliation? What does debit memo mean on a bank statement? What is a credit memo? What is meant by reconciling an...
What does debit memo mean on a bank statement? Author: Harold Averkamp, CPA, MBA Definition of Bank Debit Memo A debit memo on a company’s bank statement refers to a deduction by the bank from the company’s bank...
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
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....
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
an amount on the right side of an account. When an account balance is on the right side of an account, we say the account has a credit balance. A credit entry in an asset account will reduce the account’s usual debit...
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
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...
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.
The journal entry recorded in the general journal (as opposed to the sales journal, cash journal, etc.).
An accounting entry with only one account being debited and only one account being credited.
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...
Also known as a journal.
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...
A journal entry to correct an erroneous amount previously entered in the general ledger.
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.
discovered that one of the items had a flaw. When the retailer notified the supplier, the supplier requested that the retailer donate or discard the item and the supplier will issue a credit memo for $15. Under a...
by posting another company's credit memo to your company's bank account. Add To BOOK Balance Wrong. The credit memo does not belong to your company, therefore it should not be added to your book's Cash...
What is a deferral adjusting entry? Author: Harold Averkamp, CPA, MBA Definition of Deferral Adjusting Entry A deferral adjusting entry (one of three types of adjusting entries) pertains to a transaction that has already...
What is the entry for a loan to an employee? Author: Harold Averkamp, CPA, MBA Definition of Loan to Employee A loan to an employee is money advanced by the company to assist the employee. If the employee is expected to...
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...
What is a recurring journal entry? Author: Harold Averkamp, CPA, MBA Definition of Recurring Journal Entry A recurring journal entry is a journal entry that is recorded in every accounting period. Some recurring journal...
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...
One of the types of adjusting entries that are made at the end of the accounting period in order to report (1) revenues that have been earned but have not yet been entered into the accounting records, and/or (2) expenses...
See deferral-type adjusting entry.
A journal entry that adjusts an amount already recorded on the books of a company because part of the amount pertains to a future accounting period. To learn more, see Explanation of Adjusting Entries.
Debits and Credits Author: Harold Averkamp, CPA, MBA 120 Q&A Popular Recent What is a general ledger account? What is the double-entry system? What is a trial balance? What is a journal entry? What is the difference...
is the significance of FOB Shipping Point and FOB Destination? What is petty cash? What is a trial balance? What is a journal entry? What are prepaid expenses? What are accrued expenses and when are they recorded? What...
SalesMax, SalesMax issued a credit memo for $60 (5 units X $12) and asks GoodCorp to destroy or donate the 5 units. SalesMax will record the $60 credit memo by debiting Sales Returns and Allowances for $60 and crediting...
What is the accounting entry when an order is received? Author: Harold Averkamp, CPA, MBA There is no accounting entry recorded in a company’s general ledger accounts when an order is received. The reason is that a...
What is the accounting journal entry for depreciation? Author: Harold Averkamp, CPA, MBA Definition of Journal Entry for Depreciation The journal entry for depreciation is: Debit to the income statement account...
What is the entry when a contract is signed? Author: Harold Averkamp, CPA, MBA Accounting Entry When Signing a Contract Merely signing a contract does not by itself require a journal entry. In other words, signing a...
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