that debits $1,000 to Interest Receivable (a balance sheet account) and credits $1,000 to Interest Income (an income statement account). Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
that debits $1,000 to Interest Receivable (a balance sheet account) and credits $1,000 to Interest Income (an income statement account). Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
their personal income tax returns based on the calendar year of January 1 through December 31. Many U.S. corporations also have accounting and income tax years that coincide with the calendar year of January 1 through...
, but is not paid until the bill is received in the first month of the following year. For the current year’s financial statements to be complete (under the accrual method of accounting) the following is necessary: the...
Unscramble 5. A category of adjusting entries. DEFERRALS RSFDEEALR Unscramble DEFERRALS DSEAFRREL Unscramble 6. This type of entry occurs with income statement accounts. CLOSING IOGLSCN Unscramble CLOSING GILSNOC...
/ 3 years). This allocation of the phones’ cost to the accounting periods that benefit from the asset’s use follows the accountant’s matching principle. This makes the company’s financial statements more...
will also be reported on the income statement as an expense in the accounting period when the repair is made. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting...
that are not reported on the corporation’s income statement. Treasury stock. This is a reduction of stockholders’ equity for the amount the corporation paid to purchase but not retire its own shares of capital...
(and its contra account) is recorded in the account Bad Debts Expense which is reported on the income statement as part of the operating expenses. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
What is the difference between interest expense and interest payable? Definition of Interest Expense Assuming the accrual method of accounting, interest expense is the amount of interest that was incurred on debt during...
What is marginal cost? Definition of Marginal Cost Marginal cost is a manufacturer’s cost to produce one more unit of product. In other words, marginal cost is the change in total costs when one additional unit is...
of goodwill and a resulting impairment loss reported on the company’s income statement. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career...
will move all the income statement account balances to Retained Earnings. Let’s assume that today a corporation sold goods on credit. The corporation’s current asset Accounts Receivable will increase and the company...
Employees’ Wages Not Matched by Employer Examples of payroll taxes which are withheld from an employee’s gross wages and then remitted to the government agency by the employer include: Federal income taxes State and...
FIFO and LIFO is best with which type of products? Definition of FIFO and LIFO FIFO and LIFO pertain to the flow of products’ costs out of inventory to the cost of goods sold that is reported on the income statement....
that $8,000 of the accounts receivable will never be collected. Therefore, the company must increase the credit balance in the Allowance account by $7,000 with an accounting entry that debits Bad Debt Expense for $7,000...
Why will some asset accounts have a credit balance? Definition of Asset Account Balances In accounting, asset accounts normally have debit balances. That is, the general ledger accounts for assets typically have their...
account. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your current job Refresh your skills to re-enter the workforce...
of the month balance. View our business form for Average: 13 month. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at...
What is the difference between Notes Payable and Accounts Payable? Definition of Notes Payable The account Notes Payable is a liability account in which a borrower’s written promise to pay a lender is recorded. (The...
of Accrued Expenses Payable Accrued Expenses Payable is a liability account that records amounts that are owed, but the vendors’ invoices have not yet been received and/or have not yet been recorded in Accounts...
responsibilities are likely to be assigned to an accounts payable clerk, an accounts receivable clerk, and a payroll clerk. Generally, the bookkeeper (or accounting clerks) will not have a four-year accounting degree...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
variance accounts. A credit balance in a variance account signifies that things were better than standard. A debit in a variance account indicates that things were worse than the standard. Join PRO to Track Progress...
Why and how do you adjust the inventory account in the periodic method? Definition of Inventory Account in Periodic Method Under the periodic method or periodic system, the account Inventory is dormant throughout the...
the insurance company’s invoice, the current liability account will be debited for $75. Either technique will result in the company having an expense for $225 per pay period for the employee. Join PRO to Track...
How is the material usage variance account reported on the financial statements? Definition of Materials Usage Variance The materials usage variance (in a standard costing system) results from using more or less than the...
How do you account for a project under construction? Accounting for a Project Under Construction If a company is constructing a major project such as a building, assembly line, etc., the amounts spent on the project will...
Is a money market account a current asset or a fixed asset? A money market account is a current asset unless it is restricted for a long-term purpose. The amount of an unrestricted money market account will likely be...
Is a security deposit for a rental agreement recorded in a liability account? The person paying the security deposit would credit the asset account Cash and would debit the asset account Security Deposits. The person...
Accounting and Bookkeeping Career Perform better at your current job Refresh your skills to re-enter the workforce Pass your accounting class Understand your small business finances Watch the Video
How do you account for bond issue costs? Definition of Bond Issue Costs The costs associated with issuing bonds are debited to a contra liability account such as Bond Issue Costs. Over the life of the bonds, the issue...
Why is there a difference in the amounts for Bad Debts Expense and Allowance for Doubtful Accounts? Amount Reported as Bad Debts Expense The amount reported in the income statement account Bad Debts Expense pertains to...
See unrelated business income tax.
See residual income (RI).
. Accounting for Commissions Revenues Under the accrual basis of accounting, the commissions do not have to be received in order to be reported as revenues. If a company has earned the commissions but has not yet...
How are period costs reported in the financial statements? Under the accrual method of accounting, period costs such as selling, general and administrative expenses are reported on the income statement in the accounting...
What is the difference between the terms capitalize and depreciate? Definition of Capitalize In accounting, the term capitalize refers to adding an amount to the balance sheet as an asset (as opposed to immediately...
2001, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which ended the automatic amortization of goodwill to expense on the...
Under the accrual method of accounting, this account reports the amount of worker compensation insurance expense that pertains to the period indicated in the heading of the income statement, whether or not the company...
manufacturing overhead costs to products. Therefore, direct costing is not acceptable for external financial and income tax accounting, but it can be valuable for managing the company. Join PRO to Track Progress Mark...
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