and intangible assets acquired, minus 2) the liabilities that were assumed. Goodwill is reported on the balance sheet as a long-term or noncurrent asset. Since 2001, U.S. companies are no longer required to amortize the...
and intangible assets acquired, minus 2) the liabilities that were assumed. Goodwill is reported on the balance sheet as a long-term or noncurrent asset. Since 2001, U.S. companies are no longer required to amortize the...
adjusting entry that debits Vacation Expense for $200 (10 hours X $20 per hour) and credits Vacation Liability for $200. As a result, the balance in the balance sheet account Vacation Liability at December 31 is $2,400...
of a manufacturer. The amount of Work-in-Process Inventory would be reported along with Raw Materials Inventory and Finished Goods Inventory on the manufacturer’s balance sheet as a current asset. Definition of...
Unscramble ASSUMPTIONS MSTNISPOSUA Unscramble 4. Under this inventory system the balance in the Inventory account changes with each sale. PERPETUAL ERLPTAEPU Unscramble PERPETUAL PRETPELAU Unscramble 5. Under this...
, 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...
rate, the asset will also be recorded at $50,000. A long-term asset that will be used in a business (other than land) will be depreciated based on its cost. The cost will be reported on the balance sheet along with the...
. A deposit in transit is also known as an outstanding deposit. When there is a deposit in transit, the amount should be listed on the company’s bank reconciliation as an addition to the balance per bank. Example of...
31. The adjusting entry will consist of a debit of $2,000 to Interest Expense (an income statement account) and a credit of $2,000 to Interest Payable (a balance sheet account). Balance Sheet: Retail/Wholesale –...
depends on each state’s regulations.) The balance in Common Stock will be reported in the corporation’s balance sheet as a component of paid-in capital, a section within stockholders’ equity. Example of Common...
and Maintenance Expense. Until the invoice from Joe’s Plumbing Service is paid, Joe’s invoice serves as a supporting document for the balance in the corporation’s Accounts Payable. (The invoice is also a...
an account receivable is actually removed from the company’s receivables. Under the direct write off method there is no contra asset account such as Allowance for Doubtful Accounts. This means that the balance sheet...
What is a general ledger account? Definition of General Ledger Account A general ledger account is an account or record used to sort, store and summarize a company’s transactions. These accounts are arranged in the...
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...
, there will be no prepaid insurance nor will there be a liability for accrued worker comp expense. If the employer remits worker comp premiums to the insurance company in advance of the cost associated with wages and...
account entitled Petty Cash must be opened. (This will be an additional cash account that can be listed separately on the company’s balance sheet or its balance could be included with the balances in the other cash...
-time employee, so the company’s December 31 balance sheet must report a current liability of $3,120. Vacation pay is an example of an accrued expense and an accrued liability that is required by the matching...
What is the difference between periodic and perpetual inventory systems? Periodic Inventory System In a periodic system the account Inventory: Has only the ending balance from the previous accounting year Excludes the...
with the costs of direct labor and manufacturing overhead) A prime cost The costs of direct materials are reported in the financial statements based on where they are: Raw materials not yet in production are...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
in commissions expense that were actually incurred in order to get December’s sales Its December 31 balance sheet will not be reporting its $5,000 liability to Sales Rep Company In order for New Corp’s December’s...
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...
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...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
on the December income statement and will report accounts receivable of $10,000 on the December 31 balance sheet. Example of Reporting Expenses Under the Accrual Basis of Accounting Now let’s assume that I paid office...
ICTCONLELO Unscramble 9. A company's cost of goods sold divided by its average inventory is its inventory _____________ ratio. TURNOVER VNRUOTER Unscramble TURNOVER UNOTRERV Unscramble 10. When a company's...
of comprehensive income Balance sheet Cash flow statement Statement of stockholders’ equity Notes to the financial statements Double-Entry; Debit and Credit It is the norm for a corporation to use the double-entry...
our Accounts Payable (Explanation). 1. The general ledger account Accounts Payable is a current __________ liability account. 2. A __________ balance is typical for Accounts Payable. Debit Wrong. Credit Right! 3. The...
results in all income statement amounts expressed as a percentage of net sales. VERTICAL TAIRLVCE Unscramble VERTICAL VITALREC Unscramble 9. __________-size balance sheets show all amounts as a percentage of total...
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...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
our Financial Ratios (Explanation). 1. Which of the following is not a current asset? Inventory Wrong. Inventory IS a current asset. Prepaid Insurance Wrong. Prepaid Insurance IS a current asset because it is likely to...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
in the current accounting period is reported in the account __________ __________. 6. The amount of insurance premiums that have not yet expired is reported as an __________. Select... asset expense 7. Adjusting entries...
A corporation may want to see the effects of three possible financing options. Therefore, it prepares a projected balance sheet, income statement, and statement of cash flows for each of the three financing options....
This phrase has two connotations. One is the cost of holding inventory. In this case the carrying cost is the cost of capital tied up in inventory, the cost of storage, insurance, and obsolescence. Often this is...
One of the main financial statements (along with the balance sheet, the statement of cash flows, and the statement of stockholders’ equity). The income statement is also referred to as the profit and loss...
One of the main financial statements (along with the income statement and balance sheet). The cash flow statement reports the sources and uses of cash by operating activities, investing activities, financing activities,...
What is depletion? Definition of Depletion In accounting, depletion refers to the expensing of a company’s cost of a natural resource. Ultimately, it means moving a natural resource’s cost from the company’s...
This is an owner’s equity account. The balance in this account reflects the owner’s investment in this sole proprietorship plus the net income and minus the owner’s draws since the company began. (The...
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