rate is 5.1% and there was no accrued interest. As a result, the investors paid $99.5 million for the bonds. The corporation also incurred $1 million of bond issue costs which were paid from bonds’ proceeds. The entry...
rate is 5.1% and there was no accrued interest. As a result, the investors paid $99.5 million for the bonds. The corporation also incurred $1 million of bond issue costs which were paid from bonds’ proceeds. The entry...
. As the prepaid amount expires, the company will reduce the asset account Prepaid Insurance with a credit entry and will debit Insurance Expense. (If the company arranges for its insurance premiums to be paid monthly,...
from Accounts Receivable and at that time the following entry is made: debit Bad Debts Expense and credit Accounts Receivable. The allowance method anticipates and estimates that some of the accounts receivable will not...
in the checking account If there is an error in the company’s cash records, there will be a related error in another account because of the double-entry system of accounting. If a dishonest person is embezzling money...
that the company’s balance sheet will report the net realizable value of $194,800. If the balance in the Allowance account was $0, the company will write an adjusting entry to: Debit the income statement account such...
Bookkeeping Video Training Part 10 Adjusting entries: recap of accruals, deferrals, one balance sheet account and one income statement account will be affected Must-Watch Video Learn How to Advance Your Accounting and...
Bookkeeping Video Training Part 9 Adjusting entries: depreciation expense and accumulated depreciation reported on financial statements, useful life of the asset Must-Watch Video Learn How to Advance Your Accounting and...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
Our Explanation of Accounts Payable provides insights on the bill paying process in a large company. Included are discussions of the three-way match, early payment discounts, end of period accruals, and more.
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...
. That is, there is no outlay of cash. The accounting entry is a debit to Depreciation Expense and a credit to Accumulated Depreciation. Hence, no cash is used at the time of the depreciation entry. Cash was most likely...
for __________ Securities and Exchange Commission. 9. FASB is the acronym for __________ Financial Accounting Standards Board. 10. GAAP is the acronym for __________ generally accepted accounting principles. 11....
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...
Expense, but should have been recorded in the income statement account Promotion Expense. The correcting entry will credit Advertising Expense and will debit Promotion expense. It is important to note that the income...
with the description Deferred revenues. As of January 31 the company has completed 2/7 of the work. Therefore, it will record an adjusting entry dated January 31 that will debit Deferred Revenues for $20,000 and...
Wrong. Accounting uses 'double-entry.' This means at least two accounts are involved in every transaction. Only Two Not the best answer. While many transactions involve only two accounts, many transactions...
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...
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 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...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
. Which type of journal entries are made at the end of each accounting period so that the financial statements better reflect the accrual method of accounting? Adjusting Right! Closing Wrong. Reversing Wrong. 3. The...
a repair service to get its equipment back in working order. On January 5, AVCO received the repair bill for the quoted cost of $8,000 with terms of net 10 days. AVCO’s first accounting entry for the repair was made...
. Liabilities are not involved in this transaction. No Effect Right! Liabilities are not involved in this transaction. Owner's (or Stockholders') Equity Increase Wrong. Decrease Right! The proprietorship's...
is sometimes referred to as a noncash expense. True Right! The entry for depreciation is a debit to Depreciation Expense and a credit to Accumulated Depreciation. Cash is not involved. The depreciation entry reduces net...
for the year of the income statement might be $300,000. The $300,000 accounting entry debited Depreciation Expense and credited Accumulated Depreciation. As you can see, not a penny left the checking account in the year...
. If a store sells its old delivery truck for cash, and the cash amount is more than its book value, a __________ is reported on the income statement. 4. An asset’s book value or carrying value is the the asset’s...
(liability) to deliver the service or the product. Stockholders' (Owner's) Equity Wrong. 11. Accounting entries involve a minimum of how many accounts? One Wrong. Two Right! Because of the double-entry system,...
charge, it means that the company’s general ledger Cash account will need an entry that credits Cash for $25, and debits Bank Fee Expense or Miscellaneous Expense for $25. (The company’s Cash account needs to be...
as Prepaid Insurance or as part of Prepaid Expenses. Each month an adjusting entry will move $500 from Prepaid Insurance to Insurance Expense to recognize that the insurance coverage has a monthly cost of $500. 13. A...
... an asset a liability a revenue 31. The accrual of revenue will occur automatically when accounting software is used. Select... True False 32. A reversing entry will be the opposite of an accrual-type adjusting entry...
Our Explanation of Accounts Payable provides insights on the bill paying process in a large company. Included are discussions of the three-way match, early payment discounts, end of period accruals, and more.
earned by managers who are paid semi-monthly is referred to as __________ salary or salaries. 8. Which employee payroll classification will likely require an accrual adjusting entry for the gross salaries or wages at...
. 10. ABC Co. received $1,000 in December for services it will perform in the following month. ABC uses the accrual basis of accounting. In December ABC debited Cash for $1,000. What will be the other account involved in...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
balance in Accounts Receivable minus the credit balance in Allowance for Doubtful Accounts. Mark as wrong Mark as right Bad Debts Expense (or) Uncollectible Accounts Expense The routine adjusting entry that credits...
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...
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...
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...
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