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...
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...
as Insurance Expense for the accounting year ending on December 31 is $__________. Use the following information for answering Questions 13 - 18: On December 21, a company borrowed $100,000 from its bank. The loan has...
through May 31. When making the payment on December 1, the company debited Prepaid Insurance for $1,200 and it credited Cash for $1,200. The adjusting entry to be made as of December 31 will include a debit to the...
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...
$100,000 in mid-December but allows the customer to pay in January. ABCO’s net income is increased in December, but its Cash account will not increase until January. Next assume that ABCO acquires extensive electronic...
, let’s assume that the amount is $100. One person is designated as the petty cash custodian. This person is responsible for disbursing the small amounts and for documenting each payment with a petty cash receipt....
and its credit terms are 2/10, net 30. If the invoice is paid on July 16, the amount that should be received by the seller is $__________. 5. A company deposited one of its customer’s checks that it received as...
website for $70,000. The terms require a payment of $30,000 at the time the contract is signed and $40,000 at the end of the project, which is estimated to take 60 days. The company agrees to begin working on the...
What is a bookkeeper? Definition of Bookkeeper A bookkeeper is usually employed by a small to mid-size company (or other organization) to process and record the large volume of transactions involving sales, purchases,...
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
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...
in the account Loans Payable or Notes Payable. Example #2. When a company pays $1,000 for a loan payment consisting of $100 of interest and $900 of principal the company will record a debit of $100 in the account...
annual property tax bill of approximately $12,000 in one payment each December 28. During the year, the corporation's monthly income statements report Property Tax Expense of $1,000. This is an example of which...
19. The free IRS publication, __________ E, is entitled Employer’s Tax Guide. 20. EFTPS is the acronym for __________ Federal Tax Payment System. 21. Stockholders of a corporation who work in the corporation are also...
that was returned for insufficient funds A monthly loan payment Since the amount of a bank debit memo has already been subtracted from the bank account, the amount must also be subtracted from the company’s general...
of accounting, the receipt of cash and the payment of cash are not the focus of reporting revenues and expenses. Rather the focus is: 1) what revenues were earned, and 2) what expenses were incurred. Therefore, the...
This amount is an asset’s cost minus its accumulated depreciation. It is also the face value of bonds minus its unamortized discount (or plus its unamortized premium). It is also the amount of a corporation’s...
Our Explanation of Evaluating Business Investments compares four of the techniques for reviewing potential capital expenditures. You will be introduced to accounting rate of return, payback, net present value, and...
as right contra liability account This type of liability account is expected to have a debit balance. An example is Discount on Bonds Payable. contra liability account This type of liability account is expected to have...
Our Explanation of Chart of Accounts shows how a typical chart of accounts is organized and examples of possible account numbering. It concludes with a quick review of debits and credits.
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...
__________ __________ __________ time. Select... an interval of a moment in 9. The accounts receivable turnover ratio is best calculated using net __________ sales. Select... cash credit cash and credit 10. The payment...
accounting year appear on the statement of cash flows as a positive or negative adjustment to net income? Select... Positive Negative 22. A company had current assets of $120,000 and current liabilities of $100,000...
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...
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...
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...
amount in each full year of a plant asset’s useful life. straight-line depreciation This allocation method results in the same amount in each full year of a plant asset’s useful life. Mark as wrong Mark as right...
greater depreciation expense in the early years of an asset's life and less depreciation expense in the later years means lower taxable income and lower income tax payments in the early years and higher tax...
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.
to the depreciation methods in which larger amounts of annual depreciation are taken in the early years of an asset’s life, and smaller amounts of annual depreciation are taken in the later years. (Over the entire...
Our Explanation of Improving Profits will assist you in focusing on the costs and revenues that are relevant (and ignoring those which are not relevant) for improving profits and eliminating losses. Examples of the...
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 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 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 Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
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...
when the expense occurs (as opposed to the time of payment). Assume that a company incurs electricity expense of $400 in December that will be paid in January. In December the company must report a decrease in owner’s...
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For the past 52 years, Harold Averkamp (CPA, MBA) has
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