depreciation expense, assume that a company had paid $480,000 for its office building (excluding land) and the building has an estimated useful life of 40 years (480 months) with no salvage value. Using the...
depreciation expense, assume that a company had paid $480,000 for its office building (excluding land) and the building has an estimated useful life of 40 years (480 months) with no salvage value. Using the...
, the property, plant and equipment are reported at cost minus the accumulated depreciation (except land). If these assets have increased in value, the fair value is not reported because of the cost principle. Also,...
when the bill arrives in January The following are a few examples of payments that will never be an expense: A payment of $100,000 to purchase the land adjacent to a company Payments that are cash dividends to...
of expenditures that will not be an expense in the accounting period in which the payments are made include the purchase of land for a future expansion and the principal portion of a monthly loan payment. Here is an...
is not adjusted for inflation or for changes in the current value or replacement value of the asset. For buildings, equipment, fixtures, vehicles, and other long-lived tangible assets other than land, the asset’s...
on the balance sheet are the company’s resources such as cash, accounts receivable, inventory, investments, land, buildings, equipment, some intangible assets . Generally assets are reported at their cost or a lower...
If cash and a note are exchanged for a plant asset, is the amount of the note used in the depreciation calculation? A plant asset’s cost is depreciated, unless the asset is land. Cost is defined as the cash or cash...
What is a lease? Definition of a Lease Typically, a lease is a written agreement between an owner of property (land, building, equipment, vehicle, etc.) and a person or business that will use the property for a stated...
appearing first followed by the income statement accounts. Examples of General Ledger Accounts Some of the more common balance sheet accounts and how they are further arranged in the general ledger include: asset...
the electricity. Each department’s electricity is then allocated/assigned to the products processed in the department. The cost of raw land that was purchased for $1 million is going to be developed into 80...
and equipment. This classification includes land, buildings, machinery, equipment, vehicles, fixtures, etc. that are used in the business. These assets are reported at cost and the contra asset accumulated depreciation...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
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.
account communicates to the readers of the December 31 balance sheet that the business has an obligation to provide the future use of the hall or to return the customer's deposit. 29. A company buys a new warehouse...
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
. An example is Accumulated Depreciation. Mark as wrong Mark as right land This asset is part of the asset category property, plant and equipment but it is not depreciated. land This asset is part of the asset category...
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.
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
Unscramble 3. Land is an asset that is not ____________________. DEPRECIATED EIEAPECRDTD Unscramble DEPRECIATED EIEEACRDTPD Unscramble 4. An asset's book value is its cost minus its __________________ depreciation....
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...
Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page. 1. When an asset has the same amount of depreciation expense each full year, it is being depreciated under...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
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 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 Present Value of an Ordinary Annuity uses the appropriate present value factors for discounting a stream of equal cash amounts occurring at equal time intervals. An important feature is the use of loan...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
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 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...
of land and a building for a total cost of $300,000. If the land is estimated to be 20% of the real estate’s value, the company’s total depreciation expense throughout the life of the real estate should not exceed...
, losses, and the resulting net income. Also referred to as the P&L. Mark as wrong Mark as right land This asset is part of property, plant and equipment but it is not depreciated. land This asset is part of...
's (Stockholders') Equity is not involved in this transaction. No Effect Right! Owner's (Stockholders') Equity is not involved in this transaction. Owner's (Stockholders') Equity will be...
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.
are closed at the end of the accounting year? Select... Balance sheet accounts Income statement accounts 25. Under the accrual basis of accounting, which of the following will NOT cause a change in owner’s equity?...
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 yet received at the time it is earned) is known as the __________ basis of accounting. 13. Generally, the amounts reported in the accounts Land, Buildings, and Equipment are the historical __________ of these...
will not be depreciated? Select... Buildings Equipment Land Vehicles 10. The amount of prepaid insurance that has not expired as of the end of an accounting period should be reported as __________. Select... an asset an...
Our Explanation of Manufacturing Overhead gives you examples of what is included in manufacturing overhead. You will learn that these are indirect product costs and therefore are allocated to the products in order to...
an adjusting entry is recorded. Mark as wrong Mark as right land This asset is part of property, plant and equipment but it is not depreciated. land This asset is part of property, plant and equipment but it is not...
prevents increasing the amount when the market value of land and buildings increase. cost principle (or) historical cost principle This accounting principle requires that transactions be recorded at their cash value at...
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
Featured Review
"I am currently an accounts payable specialist for a hospital in my city residence. I became a PRO user years ago because I was looking for a website that could assist in improving my bookkeeping skills, as I wish to eventually open my own business one day. I really like the use of the materials, such as the chapter breakdowns, the summaries I can read over, the quizzes to ensure I learned what I was reading, and so much more. I feel I have greatly benefitted using the materials, as they helped build my confidence in becoming a self-employed bookkeeper in the near future. Thank you for building such a useful tool for learning accounting and bookkeeping; I see you are still #1 Best Overall Voted by Google and most websites." - Daryl T.
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: