that on December 31, a company paid $12,000 for a maintenance agreement covering the next 12 months. The transaction was recorded on December 31 with a debit of $12,000 to the current asset Prepaid Expense and a credit...
that on December 31, a company paid $12,000 for a maintenance agreement covering the next 12 months. The transaction was recorded on December 31 with a debit of $12,000 to the current asset Prepaid Expense and a credit...
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...
account and its bank statement is documented in the __________ reconciliation of the bank statement. 15. Accrued expenses are likely to pertain to transactions that have __________ been paid. Already Wrong. Not Yet...
financial statements are issued and the straight-line method of amortization is used): Credit Cash for six months of interest $60,000 Debit Interest Expense for the amount paid $60,000 Credit Discount on Bonds Payable...
Where are accruals reflected on the balance sheet? Definition of Accruals The accrual of expenses and liabilities refers to expenses and/or liabilities that a company has incurred, but the company has not yet paid...
is the carrying amount or book value of the main account. An adjunct account might be referred to as a valuation account. Example of Adjunct Account Assume that a corporation issued bonds with a maturity value of...
What is an overdraft? Definition of Overdraft An overdraft (also known as a bank overdraft) generally means that the amount of a company’s checks being presented at the bank for payment exceeded the amount on deposit....
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...
moment of the accounting period. Similar to the accounting equation, the balance sheet must always be in balance. For instance under the accrual method of accounting, when a corporation earns revenues and allows the...
of a company’s main operations? Select... gains revenues 5. The matching principle is best achieved when a company’s vacation expense and liability are reported in the period when the employees __________ the...
is it)? Accounts Receivable (asset) Wrong. Accounts Receivable would be credited if the $1,000 received was a collection of an amount billed previously. Prepaid Services (asset) Wrong. Prepaid Services is an asset...
will be the amount to be accrued? Select... $1,200.00 $3,000.00 $3,600.00 $4,200.00 View Coaching As of Tuesday, the company has a liability of $4,200 consisting of $3,000 (for the 5 days X $600 per day in the previous...
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
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...
department is likely to follow which cost behavior? Fixed Wrong. The shipping department will likely have some expenses that are fixed (depreciation of equipment, salary of supervisor, heat, etc.) and some expenses that...
. Mark as wrong Mark as right returned check fee This fee is charged by one or more banks to process a check that was not paid by the bank on which it was drawn. It will require a journal entry in the company’s general...
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
receivables). 11. The balance sheet of a retailer will value merchandise inventory at which of the following? Select... Cost Selling prices View Coaching A retailer's inventory has to be valued at its cost because...
Of The Insurance Premiums Paid Wrong. The Expired Portion Of The Insurance Premiums Paid Wrong. The Unexpired Portion Of The Insurance Premiums Paid Right! The ending balance in the asset account Prepaid Insurance...
(as opposed to when the cash is received). Similarly, expenses and losses are reported on the income statement and the related liability is reported on the balance sheet when they occur (as opposed to waiting until the...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
? Cash Is Received Wrong. Service Or Goods Have Been Delivered Right! 4. Under the accrual basis of accounting, expenses are reported in the accounting period when which of the following occurs? Cash Is Paid Wrong. An...
Wrong. False Right! 8. Commissions paid to sell products are reported as part of the cost of goods sold. True Wrong. False Right! 9. Traditional costing is more likely to be associated with allocating manufacturing...
on the first day of the next accounting period. REVERSING RNISVGERE Unscramble REVERSING VEIEGSRNR Unscramble 19. An expense incurred but not yet recorded or paid will require an ___________-type adjusting entry....
a total cost of $1,500,000. Sue is using financial leverage to own/control $1,500,000 of property with only $500,000 of her own money. Let’s also assume that the interest on Sue’s loan is $50,000 per year and...
as a "snapshot" of a company's financial position is the ______________ sheet. BALANCE ABAENLC Unscramble BALANCE LAECBAN Unscramble 2. The __________ method (or basis) of accounting reports expenses when...
for each month are paid for in the month following the purchase. 23. The number of pounds of plastic pellets that needs to be on hand at the end of February is __________ pounds. 24. The number of pounds of pellets to...
checks refer to the checks that have been paid by the bank on which they were drawn. Select... True False 12. A bank debit appearing on a bank statement meant that the bank statement balance had been decreased....
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...
accounts as of the final moment of the date shown in the heading. Note: Typically the final moment of the balance sheet is the last instant of the last day of an accounting period, such as midnight of December 31, June...
will be paid quarterly, with the first payment due on March 1. What should the corporation report on its income statement for December? Nothing Wrong. The corporation is incurring (having) interest expense every day...
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 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 Present Value of a Single Amount discusses the time value of money and the need to discount future amounts to the time of an investment or other transaction. The present value of 1 table is used to...
for a deposited check that was not paid by the bank on which it was drawn (for example, an NSF check or a check drawn on a closed bank account) Deduct: check printing charge Deduct: automatic loan payment Add:...
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 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...
are the purchasing and selling of merchandise.) Non-operating expenses may be reported on the income statements under the heading of "other income" or "non-operating income". 14. The commissions paid...
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 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.
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For the past 52 years, Harold Averkamp (CPA, MBA) has
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