or simply the gross margin.) Companies should be continuously monitoring its gross margin ratio to be certain it is sufficient to cover its selling, general and administrative expenses, interest expense, and to earn a...
or simply the gross margin.) Companies should be continuously monitoring its gross margin ratio to be certain it is sufficient to cover its selling, general and administrative expenses, interest expense, and to earn a...
, product line, and so on. Nonoperating expenses which pertain to a company’s incidental activities. A common nonoperating expense for a retailer is interest expense. Join PRO to Track Progress Mark the Question as...
they are arranged include: operating revenue accounts such as Sales and Service Fee Revenues operating expense accounts including Salaries Expense, Rent Expense, and Advertising Expense nonoperating or other income...
to as a contra-liability account. Examples of Contra-Liability Accounts Some contra-liability accounts include: Discount on Bonds Payable Bond Issue Costs Discount on Notes Payable The debit balances in the above...
Assume that for the most recent year a corporation had net sales of $410,000; cost of goods sold $230,000; SG&A $120,000; interest expense $10,000; income tax expense $9,000. For the recent year the corporation’s...
discloses the amount of interest paid, the amount of income taxes paid, and significant investing and financing activities that did not require the use of cash. Join PRO to Track Progress Mark the Question as Read...
income statement accounts used in a business include Sales, Sales Returns and Allowances, Service Revenues, Cost of Goods Sold, Salaries Expense, Wages Expense, Fringe Benefits Expense, Rent Expense, Utilities Expense,...
, the amount of interest paid, and significant noncash investing and financing activities (such as issuing common stock in exchange for land) The statement of cash flows is important because investors, lenders, financial...
and asked that his billing period be changed to cover the calendar month. They were pleased to make the change. Next, the owner called his bank and asked if the bank would be able to deduct the current month’s loan...
, advertising revenue, interest revenue, etc. The revenue accounts are temporary accounts that facilitate the preparation of the income statement. However, when a corporation earns revenue, it has the effect of...
for interest expense, and payments for income taxes. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your current job...
, 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...
activities that did not involve cash Disclosing the amount of interest paid and income taxes paid Showing that the amounts reported agree with the change in the company’s amount of cash and cash equivalents during the...
and paid by the corporation. Here are a few of the more common descriptions that will be seen under the direct method: Cash from customers Cash paid to employees Cash paid to suppliers Cash paid for interest The direct...
prices based on their costs. In the long run, the products’ selling prices must be large enough to cover all of a company’s manufacturing costs (including the variable and fixed indirect manufacturing costs) plus...
to the owner’s capital account at the end of each accounting year. Select... True False 3. The closing entries will include a __________ to the Sales account. Select... debit credit 4. Prepaid Insurance is a temporary...
as accounts payable or accrued compensation. Examples include the interest expense that the company has incurred (but has not yet paid) and repairs that took place but the vendor’s invoice has not been processed....
of the goods that were sold during the current period, and the following which also occurred during the current period: salaries earned by the company’s employees, interest expense incurred, commissions earned by...
costs (which are direct materials, direct labor, and manufacturing overhead). Nonmanufacturing overhead costs are the company’s selling, general and administrative (SG&A) expenses plus the company’s interest...
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...
, the interest expense that is reported on the income statement is the amount of interest that was __________. Select... incurred paid 5. A company’s superior management team and the company’s logo will be reported...
22. The account Retained Earnings will be included in which side of the accounting equation? Select... Left Right 23. When a company uses the accrual method and it records interest expense that it incurred but has not...
, __________ activities, and __________ activities. 2. The exchange of bonds for stock shall be reported as __________ information. 3. A corporation is required to disclose the amount of interest and income taxes that it...
: Accounts payable Loans payable Wages and payroll taxes payable Interest payable Deferred or unearned revenues Stockholders’ equity accounts (normally credit balances) include: Common stock Retained earnings...
. 20. A company borrowed $100,000 in December and will make its only payment for interest when the note comes due six months later. The total interest for the six months will be $3,600. On the December income statement...
(or) federal unemployment tax This federal payroll tax is paid by the employer based on the first $7,000 of each employee’s wages. The rate can be as low as 0.6% after a credit for contributions to a state program....
by multiplying the stated rate of 6% times the par value of $100. Since the dividend is the key feature for these investors, as long as the dividend rate is similar to the rate that the market desires, the market price...
to receive if the buyer pays on June 8? $692 Wrong. $693 Right! $800 minus $100 = $700 minus 1% of $700 = $693. $700 Wrong. $792 Wrong. 4. With credit terms of 2/10, n/30, the annual interest rate for paying...
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...
not a product cost (NA) 30. Lubricants for factory equipment. Select... direct material direct labor manufacturing overhead not a product cost (NA) 31. Interest on loans associated with finished goods. Select... direct...
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...
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...
%. Select... True False 12. Residual income includes __________ cost for the capital employed. Select... the actual interest an imputed Match one of the following centers with items 13 - 18: A center may be used more...
be recorded in the company’s Purchases account. Select... True False 18. A separate account for meals expense is helpful since business meals are expensed in full on the financial statements but may or may not be...
the employee worked four 8-hour days and one 10-hour day. Assuming that overtime is paid at a rate of time and one-half, the employee’s total gross pay for the week is $__________. 8. The amount of each employee’s...
to an annual percentage rate closest to __________. 2% Wrong. 24% Wrong. 36% Right! [(20 days early and 2%) both x 18 = 360 days and 36%] 72% Wrong. 15. The Internal Revenue Service form to be issued for amounts paid to...
as __________ expenditures. 12. When using the double-declining-balance method of depreciation, the estimated __________ __________ is not considered when calculating the depreciation for the early years of the...
line reflects the __________ cost rate per unit. Select... fixed variable Use the following information for answering Questions 18 - 20: The amounts of a company's monthly electric bills and the number of hours...
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...
Featured Review
"AccountingCoach has been a wonderful resource for me over the years. I have a degree in Accounting, but I've found that sometimes I need a refresher. After taking leave for several months, I felt my skills were a bit rusty, so I used AccountingCoach PRO to help me prepare for job interviews when I was ready to return to the workforce. AccountingCoach's explanations are concise, yet thorough enough to be used as a resource for both beginners and experienced accountants. I've been using it for years and highly recommend the PRO packages." - Camelia C.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: