into service until the date of the balance sheet. The account Accumulated Depreciation is a contra asset account because it will have a credit balance. The credit balance is reported in the property, plant and equipment...
into service until the date of the balance sheet. The account Accumulated Depreciation is a contra asset account because it will have a credit balance. The credit balance is reported in the property, plant and equipment...
What is a long-term asset? Definition of Long-term Asset A long-term asset is an asset that is not expected to be converted to cash or be consumed within one year of the date shown in the heading of the balance sheet....
Why would Prepaid Insurance have a credit balance? Definition of Prepaid Insurance Generally, Prepaid Insurance is a current asset account that has a debit balance. The debit balance indicates the amount that remains...
or from obtaining a bank loan are not revenues Revenues are amounts that companies earned by selling products or providing services. When the cash is received (at the time of the sale or service or at a later date) is...
the adjusting entry will debit Insurance Expense for $400 and will credit Prepaid Insurance for $400 Either method for recording prepaid expenses could be used as long as the asset account balance is equal to the...
. Example of a Special Journal One example of a special journal is the sales journal which is used exclusively for a company’s sales of merchandise to customers that are allowed to pay at a future date. The sales...
to: its ratio at an earlier date its targeted ratio…its goal the ratios at companies in the same industry Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and...
. If the vehicle is sold, both the vehicle’s cost and its accumulated depreciation at the date of the sale will be removed from the accounts. If the amount received is greater than the book value, a gain will be...
What is a blank check? Definition of Blank Check A blank check often refers to a check that has been signed by an authorized check signer without completing the other information (date, payee, amount). A blank check...
. business or other organization will have its accounting year end on a date other than December 31 is to coincide with its natural business year. When an organization’s fiscal year ends outside of the CPAs’ busy...
For most industries, a company’s current assets are defined as cash and other assets that will turn to cash or will be used up or consumed within one year of the balance sheet date. If a company is in an industry...
as of the date of the balance sheet If a corporation has overpaid its income taxes and is entitled to a refund, the amount will be reported on the balance sheet as a current asset such as Other receivables. If there are...
ledger accounts. At any point you can go to an account such as Salaries Expense for Sales Staff and see the year to date amount of such an expense. With the use of accounting software, an enormous quantity of...
taxable income. Definition of Stock Shares of common stock are ownership interests in a corporation. There is no promise to pay dividends nor is there a maturity date. The dividends (if any are paid) do not reduce...
that a sales invoice is for $1,000 and the buyer has been authorized to return $100 of goods. Therefore, the net amount due to the seller within 30 days is $900. However, the buyer may deduct $9 (1% of $900) if the...
. Any insurance premium costs that have not expired as of the balance sheet date should be reported as a current asset such as Prepaid Insurance. The costs that have expired should be reported in income statement...
comprehensive income. Some of these items involve currency translation, hedging, and pensions. Balance sheet. This statement of financial position reports a corporation’s assets, liabilities and stockholders’ equity...
What is interest income? Definition of Interest Income Interest income is the amount of interest earned on investments (that promise to pay interest) and/or compensation for agreeing to receive cash payments from...
should be identical. Accounting software will generate a post-closing trial balance (or any other trial balance) with a click of the mouse. Example of Post-closing Trial Balance The post-closing trial balance will have...
is the amount of interest the company has incurred but has not yet paid as of the date of the balance sheet. Interest Payable is also the title of the current liability account that is used to record and report this...
are obligations due within one year of the balance sheet date, or within the operating cycle when the operating cycle is longer than one year.) Working capital is defined as current assets minus current liabilities....
to indicate that a general ledger account has a subsidiary ledger with the supporting amounts. Mark as wrong Mark as right aging of accounts receivable This internal report sorts a company’s accounts receivable by the...
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...
for the statement of cash flows. Mark as wrong Mark as right cash and cash equivalents This balance sheet line reports a company’s cash, money market accounts and highly liquid investments which had a maturity date of...
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 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 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.
, patents, copyrights, and mailing lists are examples of __________ assets. 10. An obligation due within one year of the balance sheet date that will require the use of a current asset or create another current liability...
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...
money, it should be recorded in the Cash account with the date that the money was __________. Select... deposited earned received 10. Which part of a business loan payment is an expense? Select... Interest only...
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...
will sell for less than their par or maturity value. Perhaps the bonds will sell for 98 or 98% of face value. This means that a $100,000 bond will sell for $98,000. Assuming there is no accrued interest on the date 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...
on the right side of the accounting equation. Credit entries appear on the right side of a T-account.] 2. What type of entry will increase the normal balance of the general ledger account that reports the amount owed as...
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...
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....
removed from inventory and charged to the cost of goods sold will be the last cost of 4 units, which is $11 each. This means the cost of its December 31 inventory using periodic LIFO will be $31 (1 unit at $11 plus 2...
to the readers of the balance sheet. However, if none of the coal has been delivered as of the balance sheet date, the utility company will not report a liability amount. Companies will often have some contingent...
at the buyer’s location on January 2. On December 30, the seller should record a sale, an account receivable, and a reduction in its inventory. The buyer should record the purchase, the account payable, and the...
What is the difference between adjusting entries and closing entries? Definition of Adjusting Entries Adjusting entries are made at the end of the accounting period (but prior to preparing the financial statements) in...
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For the past 52 years, Harold Averkamp (CPA, MBA) has
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