See sole proprietorship.
See sole proprietorship.
account for a certain transaction. Example of a Credit Memo Assume that SellerCorp had issued a sales invoice for $800 for 100 units of product that it shipped to BuyerCo at a price of $8 each. BuyerCo informs...
What is net? In accounting, net usually refers to the combination of positive and negative amounts. For example, the amount of net sales is the combination of the amount of gross sales (a positive amount) and some...
Usually means every two weeks. For example, if an employee is paid every other Thursday, the employee is paid biweekly. The person paid biweekly will receive 26 paychecks per year. (People paid two times per month...
Free Alongside Ship. Terms indicating that the seller’s price includes delivery of goods at a ship’s pier. Title to the goods will transfer to the buyer alongside the ship.
A donor-imposed restriction on net assets that requires using the assets within a specified passage of time.
A special or specialized journal to record sales of merchandise to customers. In a manual system this saves a significant amount of recording time. In today’s computerized environment, sales are recorded...
A distribution of part of a corporation’s past profits to its stockholders. A dividend is not an expense on the corporation’s income statement.
Receivables other than Accounts Receivable. Examples include amounts due from employees and income tax refunds receivable.
Sometimes used as a heading in place of paid-in capital.
A decentralized division of a corporation which is responsible for and has control over its costs, revenues, and investments.
of the year has a cost of $70,000 compared to the inventory cost of $67,000 at the end of the previous accounting year. An adjustment will be entered to debit the Inventory account for $3,000 which will increase the...
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A form used at a bank to inform its customer that the customer’s account is being reduced for a fee or other charge.
Under the accrual basis of accounting the account Supplies Expense reports the amount of supplies that were used during the time interval indicated in the heading of the income statement. Supplies that are on hand...
A multi-column listing of the amounts needed to eliminate a balance in a systematic manner over the life of the item. For example, an amortization schedule for a 15-year mortgage loan would show the 180 payments. The...
liability. When a company receives money in advance of earning it, the accounting entry is a debit to the asset Cash for the amount received and a credit to the liability account such as Customer Advances or Unearned...
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A current asset account which contains the amount of investments that can and will be sold in the near future.
The current asset which reports the cost of a retailer’s, wholesaler’s, or distributor’s goods purchased to be resold, which have not yet been sold as of the balance sheet date.
to the condo project. Hence the drop ship allows XYZ to avoid some expensive non-value-added activities. When Premier ships the water heaters, it will bill XYZ and will send the invoice to XYZ. As a result XYZ will have...
and the buyer will record the transaction at $730. There will not be a general ledger account entitled Trade Discount. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your...
transaction To move an amount from an incorrect account (that was used when recording a previous transaction) to the correct account Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
of warranty is referred to as an assurance-type warranty. In accounting jargon, the assurance-type warranty is an example of a contingent that is both probable and can be estimated. Therefore, a company must record in...
suppliers $10,000 and the supplier gives the company a written promissory note to repay the amount in six months along with interest at 8% per year. The company will debit its current asset account Notes Receivable for...
Goods placed with another party without transferring ownership. See consigned goods.
The provider of goods or services. Also known as the vendor.
%). There is also an Additional Medicare Tax that applies to higher income taxpayers. Information on the Medicare surtax and other income tax information can be found at www.irs.gov. Join PRO to Track Progress Mark the...
Some examples of intangible assets include copyrights, patents, goodwill, trade names, trademarks, mail lists, etc. These assets will be reported at cost (or lower) on the balance sheet after property, plant and...
See production service department.
See budgetary slack.
The amount in a bank account according to the bank’s records.
of $1,000 to Cash (a balance sheet account) Notice that only the interest expense of $60 will be included on the income statement. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
$140,000. The $10,000 difference will be reported as interest expense over the life of the note. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and...
statement information will be incorrect: The balance sheet at the end of the current accounting period will report too little inventory. This in turn means the amount of current assets, the amount of total assets, the...
A product that emerges with other products in a common process; however, this product does not have a significant value. (If it had significant value, it would be a joint product.)
be repaid within 9 months. The bank deposits the loan proceeds of $30,000 into the company’s checking account at the same bank. The double entry to be recorded by the company is: 1) a debit of $30,000 to the...
be on hand based on the accounting information. Examples of Determining the Cost of Missing Inventory If a company’s accounting records or its inventory system uses the perpetual inventory system (and it is maintained...
Comparable amounts from several years are expressed as a percentage of the amount during a base year. For example, sales from each year of 2014 through 2023 are presented as a percentage of the sales during 2014.
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