and distribute to its stockholders, the following corporation information should be considered: Present cash balance Cash needed to finance the business operations (growth, inflation, etc.) Cash needed to finance future...
and distribute to its stockholders, the following corporation information should be considered: Present cash balance Cash needed to finance the business operations (growth, inflation, etc.) Cash needed to finance future...
, capital budgeting for expanding operations, standard costing and the reporting of variances, transfer pricing, etc. Special analyses includes cost behavior, cost-volume-profit relationships, make or buy decisions,...
and transferred to the owner’s capital account, thereby increasing owner’s equity. (At a corporation, the credit balances in the revenue accounts will be closed and transferred to Retained Earnings, which is a...
bonds. The result is that liabilities decrease and stockholders’ equity increases. 3) A corporation declares a cash dividend. A current liability Dividends Payable is created and the Retained Earnings (part of...
, Accumulated Depreciation, Notes Payable, Accounts Payable, Payroll Taxes Payable, Paid-in Capital, Retained Earnings, and others. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
method, the interest expense will be included in the company’s net income or net earnings. The interest expense is adjusted to a cash amount through the changes to the working capital amounts, which are also reported...
position and the for-profit corporation’s balance sheet is the equity section: The for-profit corporation’s equity section has the heading Stockholders’ Equity. Within this section are the paid-in capital amounts...
computed when evaluating potential capital expenditures. However, the payback period is considered to be flawed because it ignores the following: Cash flows occurring after the payback period Time value of money. Join...
in exchange for cash or other assets. Donated capital was received. Here is a list of items that could cause a decrease in the total amount of a corporation’s stockholders’ equity: Negative net earnings or a net...
of the inventories is lower than the cost. Companies should physically count their inventories at least once a year and the calculations reviewed carefully since the cost of the inventory is critical in the calculation...
and transferred to the owner’s capital account, thereby reducing owner’s equity. (At a corporation, the debit balances in the expense accounts will be closed and transferred to Retained Earnings, which is a...
the financial statements with the management and owners of the company. The accountant will also be involved in budgeting of operations and capital improvements, cost accounting, reports to government agencies, and...
How do you calculate the cost of carrying inventory? Definition of Cost of Carrying Inventory The cost of carrying inventory (or cost of holding inventory) is the sum of the following: Cost of money tied up in inventory,...
of a corporation, the equity account is Retained Earnings. In the case of a sole proprietorship, the equity account is the owner’s capital account. As a result, the income statement accounts will begin the next...
that are recorded in income statement accounts. This allows the balance sheet account Owner’s Capital (or Retained Earnings) to avoid having all of the thousands or millions of revenue and expense transactions from...
that are due within one year of the balance sheet date and will require the use of a current asset or will create another current liability. Mark as wrong Mark as right working capital (or) net working capital This is...
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
by total __________. 19. Capital expenditures (and perhaps dividends) are deducted from the net cash flow from __________ activities when calculating free cash flow. 20. Common-size financial statements are related to...
or other assets into the business. For example, if M. Jones invests $20,000 of cash in her business, the company’s asset Cash increases by $20,000 and the owner’s equity account M. Jones, Capital increases by...
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...
or paid today are more valuable than the dollars that will be received in the future years. The process of evaluating and deciding which long-lived assets will be made is referred to as capital budgeting and the amounts...
its face value, ___________ on Bonds Payable is recorded. PREMIUM PUIREMM Unscramble PREMIUM MERMIPU Unscramble 7. The market interest rate and the yield-to-maturity should be the same as the __________ interest rate....
as the equipment’s fair market value. Select... True False 17. Depreciation is considered to be a noncash expense. Select... True False 18. An asset’s annual depreciation is based on estimates. Select... True False...
is reported as an __________. ASSET STAES Unscramble ASSET EATSS Unscramble 13. Property is not reported at its current market value because of the cost ____________. PRINCIPLE PRLNEICPI Unscramble PRINCIPLE NPRILPCEI...
to the corporation’s __________ __________ per share of common stock. Select... market value net income 16. If the inventory turnover ratio is 9, the days sales in inventory is __________ days (rounded to the nearest...
Our Explanation of Present Value of a Single Amount discusses the time value of money and the need to discount future amounts to the time of an investment or other transaction. The present value of 1 table is used to...
cost principle) requires that transactions be recorded at their cost. Cost is defined as the cash amount or the cash equivalent amount at the time of the transaction. Except for certain marketable investment securities...
-term assets that are used in a business. The purpose of depreciation is to match the cost of the asset with the revenues that are earned from the use of the asset. Note that the purpose of depreciation is not to...
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...
. The specified rate could be the investor’s cost of capital or it could be another hurdle rate that must be earned. Advantages of using the net present value to evaluate investments include the following: All of an...
important because of its effect on the following: Cost of goods sold for more than one accounting period The amount of a company’s current assets The company’s working capital The company’s current ratio Join PRO...
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...
is the total amount that the owner has earned before income taxes for 1) the capital invested in the business and 2) the owner’s compensation for working in the business. In the case of a regular corporation owned by...
for ordering a larger quantity. Select... True False 13. The EOQ model can result in additional profit without the need for capital expenditures. Select... True False 14. The costs used in the EOQ model are the...
, and the resulting amount of current assets, working capital, total assets, and stockholders’ equity. I believe this objective will require some type of an adjustment to the the Inventory account balance and to...
a corporation’s Retained Earnings account (or a sole owner’s capital account) and will be closed to these balance sheet equity accounts at the end of the accounting year. Join PRO to Track Progress Mark the Question...
Weekly Income Statement When I became a director of a meatpacking company, I was concerned about the thin profit margins, the corporation’s lack of working capital, and my inexperience in the industry. The company...
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