. corporations should include all of the following: Income statement Statement of comprehensive income Balance sheet or statement of financial position Statement of cash flows Statement of stockholders’ equity Join PRO...
. corporations should include all of the following: Income statement Statement of comprehensive income Balance sheet or statement of financial position Statement of cash flows Statement of stockholders’ equity Join PRO...
and reduces a company’s net income. However, the interest paid also causes a change in the company’s balance sheet and statement of cash flows. Reporting Interest Paid on the Statement of Cash Flows In the statement...
Cost Let’s assume that a company purchased land in 1997 for $100,000. It continues to own the land and has not made any improvements. Today the land should be reported on the company’s balance sheet at its...
. The combination of all the budgets is referred to as the company’s master budget or profit plan. Budgets help management decide which activities it will undertake and how the company’s resources will be used. If...
. The land used in a business will be reported on the company’s balance sheet under the asset heading of property, plant and equipment. Example of Land Assume that a company purchases a warehouse for its business...
Why aren't retained earnings distributed as dividends to the stockholders? Definition of Retained Earnings Retained earnings is one component of the stockholders’ equity section of a corporation’s balance sheet....
will be the following: Debit Premium on Bonds Payable for $3,000 Credit Interest Expense for $3,000 Reducing the balance in the account Premium on Bonds Payable by the same amount each period is known as the...
be thought of as a use of cash, a decrease in cash, or a negative amount on the cash flow statement. 19. An increase in the balance of Prepaid Insurance. Positive Wrong. Prepaid Insurance is a current asset. An increase...
What is an outstanding check? Definition of Outstanding Check An outstanding check is a check that a company has issued and recorded in its general ledger accounts, but the check has not yet cleared the bank account on...
of a plant asset (such as a building, equipment, vehicle, etc.) Mark as wrong Mark as right contra asset account The type of asset account is expected to have a credit balance. An example is Accumulated Depreciation....
What is turnover? Definition of Turnover In accounting, the term turnover can have more than one meaning. In some countries turnover is used in place of sales. Turnover also pertains to certain financial ratios that...
and accounts payable in its purchase transactions, the term trade payables covers both the accounts payable and these short-term notes payable. Accounts payable is reported on the company’s balance sheet as a current...
or dates appearing in the heading of the statement of cash flows will be similar to which of the following financial statements? Select... Balance sheet Income statement View Coaching The statement of cash flows reports...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
’ earnings, and 2) the employer’s portion of the FICA and unemployment taxes. Mark as wrong Mark as right current liabilities This balance sheet classification represents a company’s obligations that are due within...
What is the difference between net cash flow and net income? Definition of Net Cash Flow Net cash flow is the combination of the cash received and the cash disbursed. In other words, it is the combination of the debit...
and the current year’s ending inventory is $115,000. Under the periodic inventory system, this inventory increase of $15,000 could be recorded as a debit of $15,000 to Inventory (thereby increasing the account balance...
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...
of financial position is another name for the balance sheet and it reports a company's assets, liabilities, and owner's (or stockholders') equity usually at the final moment of the accounting period. 2....
Our Explanation of Present Value of an Ordinary Annuity uses the appropriate present value factors for discounting a stream of equal cash amounts occurring at equal time intervals. An important feature is the use of loan...
with the depreciation expense on the income tax return. Select... True False 8. The balance in the account Accumulated Depreciation should be approximately the same as the balance in the account Depreciation Expense....
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
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...
Our Explanation of Bonds Payable covers the recording of bonds, the accrual of interest expense, and the amortization of the discount and premium on bonds payable. You gain an understanding on why the market value of...
A sorting of a company’s accounts payable by due date.
See Explanation of Accounting Equation.
What are accounting ratios? Definition of Accounting Ratios Accounting ratios, which are also known as financial ratios, are one part of financial statement analysis. Accounting ratios will often relate one financial...
Usually refers to one of the accounts receivable that was deemed to be uncollectible or worthless and was removed from the general ledger account Accounts Receivable.
in the general and subsidiary ledgers Preparing an unadjusted trial balance and perhaps preparing a worksheet Determining and recording adjusting entries Preparing an adjusted trial balance Preparing the financial...
See accounts payable.
What is an accountant? Definition of Accountant Accountants are employed by businesses and other organizations to report their financial results according to generally accepted accounting principles (GAAP) and income tax...
The sale of the accounts receivable (usually for a fee) to a third party known as a factor.
. A supplier’s invoice that is not completely processed at the end of an accounting period may require which of the following entries? Select... Adjusting Closing Reversing 19. Accounts Payable is associated with which...
What is public accounting? Definition of Public Accounting Public accounting can be viewed as firms of accountants that serve clients such as businesses (retailers, manufacturers, service companies, etc.), individuals,...
Featured Review
"I found AccountingCoach when I was preparing to apply for positions in the accounting field after an absence of 15 years. I previously worked for 6+ years as an accounts receivable clerk and general accounting assistant, but I felt that my skills were rusty and wished to refresh my memory on the basic principles of accounting. This was exactly what I needed. I found that I really had not forgotten as much as I feared I had. With regained confidence, I was able to secure a position as an accounting assistant to an accounting manager for a small company." - Becky W.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: