on the income statement over the asset’s useful life. Accountants point out that depreciation is an allocation process which does not result in reporting the asset’s market value. Example of Recording Depreciation...
on the income statement over the asset’s useful life. Accountants point out that depreciation is an allocation process which does not result in reporting the asset’s market value. Example of Recording Depreciation...
an accounting adjusting entry in which the account Depreciation Expense is debited and the contra asset account Accumulated Depreciation is credited. Effects of Depreciation The following are some of the effects for a...
not mean that the general ledger is free of errors. For instance, recording a debit entry into the Equipment account instead of recording the debit in the Equipment Repairs Account will not be uncovered by the trial...
but have not yet been recorded in the accounting records should be entered or recorded through an accrual adjusting entry which will: Debit Wages Expense Credit Wages Payable or credit Accrued Wages Payable Wages...
, the expense will be recorded as part of the entry. When the company pays the invoice, the balance in Accounts Payable is reduced and the balance in the company’s Cash account is reduced. The payment does not affect...
, the money is counted and is deposited into the church’s bank account. The transaction to record the cash and the revenues (remember double entry) should be dated Sunday, June 4, since that is the day of the...
debit card, the bank’s liability account such as Customer Checking Accounts or Demand Deposits will be reduced. To reduce the normal credit balance in the bank’s liability account, a debit entry is required. The...
entry that debits Interest Expense for $500, and credits Interest Payable for $500. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career...
Debts is a contra asset account (an asset account with a credit balance). It is used along with the account Accounts Receivable in order for the balance sheet to report the net realizable value of the company’s...
account, you will need to record the check in your general ledger. The entry will be a credit to the general ledger cash account and a debit (or debits) to the appropriate account. It might be helpful to recall the...
receives cash of $500 but cannot readily determine the reason why it received the $500. Obviously, the company’s asset Cash is to be debited, but the account to be credited (required by the double-entry system) for...
, the Dividends account is closed to Retained Earnings.) The second entry occurs on the date of the payment to the stockholders. On that date the current liability account Dividends Payable is debited and the asset...
of an interest payment of $500 and a principal payment of $1,500. The company’s entry to record the loan payment will be: Debit of $500 to Interest Expense Debit of $1,500 to Loans Payable Credit of $2,000 to Cash The...
). The company will record a December 31 accrual adjusting entry which debits Interest Receivable for $300 and credits Interest Income for $300. The Interest Receivable account balance will be reported on the company’s...
there is a total of $2,900 in Accounts Receivable that will not be collected, you need to enter an additional credit amount of $900 into the Allowance for Doubtful Accounts. The other part of this adjusting entry 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...
reports the major changes in a corporation’s cash and cash equivalents. Amounts are grouped according to operating, investing, and financing activities. Mark as wrong Mark as right double-entry accounting (or)...
Accounting Equation Basic Accounting Equation In accounting (and bookkeeping) the basic accounting equation is: Thanks to double-entry accounting (or double-entry bookkeeping) the basic accounting equation will/...
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...
Our Explanation of Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
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...
In adjusting entries, how do I know which T-accounts to use? We illustrate the common adjusting entries with the use of T-accounts in the Explanation of the Topic Adjusting Entries available for your reading at no...
Bookkeeping Video Training Part 8 Adjusting entries: accrued expenses, reversing the accrual of expenses after the accounting period is over Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career...
Bookkeeping Video Training Part 7 Adjusting entries: deferred revenues, accrued revenues, reversing accruals to avoid double-counting Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform...
of prepaid insurance that has expired in the accounting period is reported as an _____________. EXPENSE XEPSENE Unscramble EXPENSE SXNPEEE Unscramble 6. A credit entry will cause the Cash account balance to...
, the balance in the account Allowance for Uncollectible Accounts must be a credit balance of $6,000. This will communicate that the net amount that will be turning to cash is $94,000. If the balance in the Allowance for...
credited 18. The entry to replenish the petty cash fund will include a credit to the account __________ (Cash, Petty Cash) for $ __________. Select... Cash Petty Cash 19. The amount to Cash Short & Over is...
Our Explanation of Financial Accounting introduces some of the basic accounting concepts and how they affect the income statement, balance sheet, and other financial statements.
this topic by reading our Present Value of an Ordinary Annuity (Explanation). 1. After the payments in an ordinary annuity have been discounted to time period 0, you will have the __________ present value of the...
this topic by reading our Future Value of a Single Amount (Explanation). 1. The amount at a later point in time is known as a __________ future value. 2. __________ Compound (or Compounded) interest refers to earning...
because of the double-entry system. accounting equation (or) basic accounting equation This algebraic expression is Assets = Liabilities + Stockholders’ (or Owner’s) Equity. It should remain in balance because of...
Accounts Payable. Amounts owed but not yet recorded in the Accounts Payable account will need to be accrued through an adjusting entry. The adjusting entry will credit a liability account such as Accrued Expenses...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
for __________ __________ __________. 3. A bank fee for a deposited check being returned NSF will require the depositor to __________ its general ledger Cash account. Select... debit credit 4. Journal entries are needed...
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
statements. GAAP (or) US GAAP This acronym indicates the accounting rules that must be followed when a U.S. corporation issues its financial statements. Mark as wrong Mark as right adjusting entries These journal...
it indicates that the company has paid more than the amount owed, has made an incorrect entry, etc.) Equity accounts including the stockholders’ equity accounts Common Stock, Paid-in Capital in Excess of Par Value,...
The bookkeeping equation should always be in balance when double-entry bookkeeping (or accounting) is used. Example of Bookkeeping Equation Assume that Sara Jones starts a sole proprietorship, SJCO, by depositing $900...
schedule will indicate the amounts. If the loan payments are made on the last day of every month, the interest payment (or interest portion of the loan payment) will likely be the expense for the month. However, if the...
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