What is a journal? Definition of a Journal In accounting and bookkeeping, a journal is a record of financial transactions in order by date. Traditionally, a journal has been defined as the book of original entry. The...
What is a journal? Definition of a Journal In accounting and bookkeeping, a journal is a record of financial transactions in order by date. Traditionally, a journal has been defined as the book of original entry. The...
has a debit balance of $40,000 for the cost of the goods on hand at a balance sheet date, but the net realizable value is only $37,000, the Allowance account will be adjusted to show a credit balance of $3,000. Join PRO...
How do you record the interest that is unpaid on a note payable? Definition of Interest Unpaid on Note Payable Interest that has occurred, but has not been paid as of a balance sheet date, is referred to as accrued...
Receivable. The accrued interest receivable is a current asset since the $300 is expected to be collected within one year of the balance sheet date. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
premium. The balance in the account Prepaid Insurance will be the amount that is still prepaid as of the date of the balance sheet. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
What is a current liability? Definition of Current Liability A current liability is: An obligation that will be due within one year of the date of the company’s balance sheet, and Will require the use of a current...
What is a noncurrent asset? Definition of Noncurrent Asset A noncurrent asset is an asset that is not expected to turn to cash within one year of date shown on a company’s balance sheet. (This assumes that the company...
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 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 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 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 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...
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...
of __________ financial position. 4. The statement of __________ cash flows may be prepared under the direct or indirect method. 5. The nonprofit's financial statement that reports amounts as of a particular date...
. INTEREST IENTESTR Unscramble INTEREST ENSITTER Unscramble 2. A bond's principal comes due on the bond's ____________ date. MATURITY ARTTIMUY Unscramble MATURITY AIUMYRTT Unscramble 3. A bond is reported on...
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...
is not a current asset? Accounts Receivable Wrong. Accounts Receivable IS a current asset because the accounts will usually be collected in a month or two. Land Right! Land is not a current asset, because land will NOT...
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...
Our Explanation of Adjusting Entries gives you a process and an understanding of how to make the adjusting entries in order to have an accurate balance sheet and income statement. Eight examples including T-accounts for...
. Mark as wrong Mark as right current assets This section of the balance sheet reports the company’s cash plus resources which are usually expected to turn to cash within one year of the balance sheet date (or within...
to interest expense will be reported immediately after the par value of the bonds in the liabilities section of the balance sheet. Generally, if the bonds are not maturing within one year of the balance sheet date, the...
must report all of the amounts owed for work performed up to midnight of June 30. The expenses reported on the income statements for the month and year-to-date ended on June 30 must include all the payroll related...
balances. Example of Using the Dividends Account Assume a corporation declares a cash dividend of $50,000 on its common stock. On the date the dividend is declared, the corporation will credit the current liability...
or maturity amount at a specified date some years in the future. The agreement containing the details of the bonds payable is known as the bond indenture. U. S. corporations issue bonds instead of common stock for...
the related revenue being reported. Therefore, at each balance sheet date, the utility must accrue for the revenues it earned but had not yet recorded. This is done through an accurual adjusting entry that debits a...
What is yield to maturity? Definition of Yield to Maturity Yield to maturity is the total return that will be earned by someone who purchases a bond and holds it until its maturity date. The yield to maturity might also...
future cash flows back to the time when cash is invested. (The date that the cash is invested is often referred to as the “present” or the very beginning of the investment’s first year.) The greater the time value...
the future benefit of the cost Examples of Expense Some of the expenses that will be reported on a retailer’s income statement for the month of August include: Cost of goods sold for the August sales. (The date that...
. An entry in the general journal will include the date, the account with the amount that is to be debited, the account with the amount that is to be credited, and a brief description. After these relatively few...
.) The profit and loss statement’s period of time could be a year, a year-to-date period such as nine months, a quarter of a year, one month, four weeks, 52 weeks, etc. Under the accrual basis (or method) of accounting...
, the written note specifies the principal amount, the date due, and the interest to be paid. For most companies, if the note will be due within one year, the borrower will classify the note payable as a current...
What is a creditor? Definition of Creditor A creditor could be a bank, supplier or person that has provided money, goods, or services to a company and expects to be paid at a later date. In other words, the company owes...
Allowance for Doubtful Accounts. The debit balance in Accounts Receivable minus the credit balance in Allowance for Doubtful Accounts will result in the estimated amount of the receivables that will be converted to...
What is prepaid insurance? Definition of Prepaid Insurance Prepaid insurance is the portion of an insurance premium that has been paid in advance and has not expired as of the date of a company’s balance sheet. This...
Why is Accumulated Depreciation an asset account? Definition of Accumulated Depreciation The account Accumulated Depreciation reports the total amount of depreciation expense that has been recorded from the time the...
to pay at a later date, the company records the sale with a debit to Accounts Receivable and a credit to the revenue account Sales. The Sales account is a temporary account used to keep a tally of the sales made during...
to be collected within one year of the balance sheet date is reported in the current asset section of the lender’s balance sheet. The remaining principal of the note receivable is reported in the noncurrent asset...
, the amortizations are up to date and the general ledger accounts had the following balances: Bonds Payable had a credit balance of $10,000,000 Bond Discount had a debit balance of $240,000 Bond Issue Costs had a debit...
What is long-term debt? Definition of Long-term Debt In accounting, long-term debt generally refers to a company’s loans and other liabilities that will not become due within one year of the balance sheet date. (The...
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