and its credit terms are 2/10, net 30. If the invoice is paid on July 16, the amount that should be received by the seller is $__________. 5. A company deposited one of its customer’s checks that it received as...
and its credit terms are 2/10, net 30. If the invoice is paid on July 16, the amount that should be received by the seller is $__________. 5. A company deposited one of its customer’s checks that it received as...
Our Explanation of Nonprofit Accounting includes a chart that contrasts the financial statements of a nonprofit (or not-for-profit) organization with those of a for-profit business corporation. There are many examples to...
3. A customer’s check dated June 27 was received by XYZ Corp. on June 30 and was deposited on July 2. The amount of the check should be included in XYZ’s cash balance as of the following date: __________. 4....
30, causing the May 30 bank account balance to be a negative $350. If the bank is eager to earn fees, its computer will process the $400 check first, followed by the $250 check. This will cause the company to incur two...
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...
How is petty cash reported on the financial statements? Definition of Petty Cash Petty Cash is a small amount of money that a company has available to pay small amounts without writing a company check. The money might be...
How does petty cash affect expenses? Definition of Petty Cash Petty cash is a small amount of currency and coins that a company has available to make very small payments instead of requesting and processing a company...
Advertising Expense. The accounts for revenues are almost always credited. When a bakery sells its products, it credits Sales. When a bank earns interest on its loans, it credits Loan Interest Revenues. When a company...
What is petty cash? Definition of Petty Cash Petty cash or a petty cash fund is a small amount of money available for paying small expenses without writing a check. Petty Cash is also the title of the general ledger...
solvency is also at risk if it is unable to operate profitably. I suspect that the definition of solvency varies among people in the same country and from country to country. You should check the legal system in your...
a number is assigned for reference and control. Receipts or other documentation justifying the disbursement should be attached to the petty cash voucher. When the petty cash fund is replenished, the completed petty cash...
is on the bank statement, but not yet on the company’s books, a journal entry is needed to credit Cash and to debit an expense such as Bank Charges or Miscellaneous Expense. Check printing charges Customer checks that...
to an authorized person for payment. After making payment, a copy of the check is attached and the voucher is stamped “Paid.” It is then filed in the paid voucher file in order to prevent a duplicate payment. Join...
for each year of employment times the employee’s average monthly salary or wages during a three-year period prior to retirement. A hypothetical calculation for an employee retiring at age 65 might be 1% X 30 years of...
Is the sales tax paid on merchandise that you will resell an expense? I believe that most states have sales tax exemptions for merchandise purchased for resale. Check with your state’s sales tax department to see if...
When do you put parentheses ( ) around a number? Definition of Amounts in Parentheses Parentheses around a number could have a variety of meanings. For example, parentheses could indicate any of the following: A negative...
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...
liability account Wages Payable is increased. When the employee is paid, the account Wages Payable is decreased and Cash is decreased. When a company’s software prepares a check, the software will automatically reduce...
How do you balance a checkbook? Definition of Balance a Checkbook To balance a company checkbook means comparing the amounts on the bank statement (or other bank account detail) to the amount in the company’s...
. (For an individual, the book balance is likely to be the balance appearing in the person’s check register.) It is common for the book balance to not agree with the balance on the bank statement as of the same day....
, there is $6.00 on hand and there are $93.00 of petty cash vouchers. This indicates a shortage of $1.00. Using the above information, the journal entry to replenish the petty cash fund will include a credit of $94.00 to...
roots in manufacturing businesses. However, today it extends to service businesses. For example, a bank will use cost accounting to determine the cost of processing a customer’s check and/or a deposit,...
(usually in the form of a check or currency). Some payments are current period expenses (e.g. current month’s rent payment) but many payments are not expenses of the current period. Examples of Expenses and Payments...
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...
receives the money from its customer that was billed in the prior month, which account should be credited? Select... Accounts Receivable Cash Sales 16. When a company records a check for its monthly rent, the account...
is the __________ chart of accounts. 6. When a check is written, a cash account should be __________. Debited Wrong. Credited Right! 7. Liability accounts will normally have __________ balances. Debit Wrong. Credit...
. It is common for inexpensive, yet sophisticated accounting software to use the double-entry system, however, it may prompt you for only one account name or number. For example, if the software prepares a check, it will...
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...
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...
Expense, Wages Expense, and Advertising Expense are expected to have __________ balances. Select... debit credit 8. A sole proprietor’s Drawing Account will likely have a __________ balance. Select... debit credit 9....
journal Trial Balance 2. The bookkeeping or accounting equation is __________ = liabilities + owner’s equity. 3. When a company pays a bill by writing a check, the company should __________ a Cash account. Select......
a bill by writing a check, the account Cash is __________. Select... credited debited 19. The account that is debited when a sole proprietor withdraws some of the business’s cash for personal use is __________....
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
to the electricity bill that was paid this month, if that bill is for the previous month’s electricity usage. Check the meter reading dates on the bill to be sure the dates of the electricity usage agree with the...
. In the bank statement reconciliation a bank charge for check printing will require a __________ entry to one of the company’s cash accounts. Select... debit credit 32. When preparing a bank reconciliation which is...
Our Explanation of Chart of Accounts shows how a typical chart of accounts is organized and examples of possible account numbering. It concludes with a quick review of debits and credits.
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...
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