Ledger Control Accounts A common example of a general ledger account that can become a control account is Accounts Receivable. The summary amounts are found in the Accounts Receivable control account and the details for...
Ledger Control Accounts A common example of a general ledger account that can become a control account is Accounts Receivable. The summary amounts are found in the Accounts Receivable control account and the details for...
Discount for $0.5 million Debit Bond Issue Costs for $1 million Credit Bonds Payable for $100 million Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and...
is calculated by dividing a company’s cost of goods sold during a year by the average inventory during the same year. Accounts receivable turnover ratio. This ratio is computed by dividing the credit sales during a...
), and Income statement accounts (revenues, expenses, gains, losses) Under the double entry system of accounting and bookkeeping, every business transaction will affect two (or more) general ledger accounts. In addition,...
investors and lenders Financial analysts Credit rating organizations Some customers and suppliers Government agencies Since the external financial statements are likely to be compared to those of other corporations (and...
believes will be best for the small payments it experiences. If the amount is $100, the company check will be coded to debit Petty Cash for $100 and to credit Cash for $100. One person should be designated to be the...
Expense and credit Insurance Premiums Payable. 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 Refresh...
. On August 31 the corporation receives an invoice from Joe’s for $900. The invoice states that the $900 is due within 30 days. After reviewing and approving the invoice, the corporation enters Joe’s invoice into its...
generally have a 120 or 150 credit college degree including at least 30 credits of accounting courses plus 30 credits of other business courses. A bookkeeper is likely to be employed at a smaller company or organization...
of materiality and cost/benefit allow the accountants to ignore the time value of money for the routine accounts receivable and accounts payable having credit terms of 30 or 60 days. Join PRO to Track Progress Mark...
is not relevant. The revenue recognition principle prohibits a company from showing a gain from merely holding a plant asset. What would you credit if you increased the plant asset amount? Those four accounting...
Is depreciation a source of funds? Definition of Depreciation Depreciation is the systematic allocation of the cost of a business asset to expense over the useful life of the asset. The accounting for depreciation is a...
liabilities are $500,000 the current ratio is 1.2:1. Obviously a larger current ratio is better than a smaller ratio. Some people feel that a current ratio that is less than 1:1 indicates insolvency. However, some...
31. The adjusting entry will consist of a debit of $2,000 to Interest Expense (an income statement account) and a credit of $2,000 to Interest Payable (a balance sheet account). Balance Sheet: Retail/Wholesale –...
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...
(noncurrent) liability account Bonds Payable will be credited with the face value of the bond. Cash will be debited for the cash received, and any difference will be recorded in one or two of the following bond-related...
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...
tax return (TAX)? Select... Straight line on both FS and TAX Accelerated on FS and straight line on TAX Straight line on FS and accelerated on TAX Accelerated on both FS and TAX View Coaching To optimize its cash flows...
This financial statement reports all of the changes to the equity of a corporation that occurred during the periods shown in the heading. Mark as wrong Mark as right statement of comprehensive income This financial...
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 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 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...
]. Receivables Turnover Ratio The receivables turnover ratio is an indicator of how fast a company’s accounts receivable are (or were) collected. The calculation is: credit sales for a year divided by the average...
Accounts Payable Accounts Payable Accounts payable are sometimes referred to as trade payables. Accounts payable involve the amounts that a company owes to vendors and others who have supplied goods or services on...
are required by the __________ principle. 6. The adjusting entry for depreciation will include a debit to Depreciation Expense and a credit to __________ __________. 7. Adjusting entries help to convert accounting...
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...
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 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...
of the straight-line method will __________the net present value and internal rate of return. Select... decrease increase have no effect on 15. The internal rate of return calculation uses cash flow amounts, while the...
of the year has a cost of $70,000 compared to the inventory cost of $67,000 at the end of the previous accounting year. An adjustment will be entered to debit the Inventory account for $3,000 which will increase the...
Expense, but should have been recorded in the income statement account Promotion Expense. The correcting entry will credit Advertising Expense and will debit Promotion expense. It is important to note that the income...
the revenue it earned but had not received as of December 31. The adjusting entry dated December 31 will debit the balance sheet current asset account Interest Receivable for $5,000, and will credit the income statement...
Expense and a credit to Accumulated Depreciation. Reporting bad debts expense pertaining to accounts receivable. This is done by either debiting Bad Debts Expense and crediting Allowance for Doubtful Accounts, or by...
for the month amounting to $63,000. The sales invoices represent the goods shipped to customers and includes $1,000 of sales taxes pertaining to its retail customers. The company offers credit terms of 1/10, net 30...
be reflected in the company’s general ledger accounts: Any unrecorded depreciation up until the time of the sale must be recorded with a debit to Depreciation Expense and a credit to Accumulated Depreciation The...
A mathematical tool to optimize profits (contribution margin) given a limited amount of inputs and other constraints.
Receivable minus the credit balance in the account Allowance for Doubtful Accounts. 10. An advance of money to a company employee should be reported on the balance sheet as which of the following? Select... Accounts...
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...
! The proprietor's Capital account increased. (If the company is a corporation, then the Common Stock account(s) would increase.) Decrease Wrong. No Effect Wrong. 8. The company purchases a significant amount of...
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...
Featured Review
"I am a student starting over at 56. Accounting is not easy for me although I love learning it. The AccountingCoach has helped me clearly understand. It explains things in a way I understand. Accounting is not simple at first, I wonder if I will ever feel I 'know' it fully. But, I know I would not have an 'A' had I not found AccountingCoach. It has been well worth what little money I spent for it. I would be the best sales person for AccountingCoach since I share it with so many people. Thank God I found you!" - Lisa B.
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: