What does capitalize mean? Definition of Capitalize In accounting, the word capitalize means to record an expenditure as an asset. The cost of this asset is then allocated to expense over its useful life. (If the...
What does capitalize mean? Definition of Capitalize In accounting, the word capitalize means to record an expenditure as an asset. The cost of this asset is then allocated to expense over its useful life. (If the...
Depreciation) The amount that has not yet been depreciated (the book value of the asset) Example of Accumulated Depreciation Let’s assume that at the beginning of the current year a company’s asset account Equipment...
-on experience. Don’t be overly concerned with the starting pay since your value will come after you demonstrate your proficiency as an effective bookkeeper. Join PRO to Track Progress Mark the Question as Read...
computed when evaluating potential capital expenditures. However, the payback period is considered to be flawed because it ignores the following: Cash flows occurring after the payback period Time value of money. Join...
to the condo project. Hence the drop ship allows XYZ to avoid some expensive non-value-added activities. When Premier ships the water heaters, it will bill XYZ and will send the invoice to XYZ. As a result XYZ will have...
Cost on Income Statement Let’s assume that a company buys equipment for $100,000 and it is expected to be used for 10 years with no salvage value at the end of its useful life. Using the straight-line method of...
of a contra asset account is Accumulated Depreciation. For instance, if a company has a plant asset such as Equipment with a debit balance of $92,000 and the account Accumulated Depreciation has a credit balance of...
that the company’s balance sheet will report the net realizable value of $194,800. If the balance in the Allowance account was $0, the company will write an adjusting entry to: Debit the income statement account such...
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...
the useful life of the asset in order to match an asset’s cost to the accounting periods in which the asset is used. Mark as wrong Mark as right assets These are a company’s resources that have a future economic...
of the statement of cash flows. Mark as wrong Mark as right gain on sale of equipment This occurs when equipment is sold for more than its book value. The amount is deducted from net income in the operating activities...
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...
in the total cost is explained by the change in the number of DLHs? Select... 0% 64% 80% 100% 17. There can be a high correlation between an independent variable and a dependent variable without the existence of a cause...
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...
... balance sheet income statement 8. Depreciation of a company’s equipment is recorded primarily to __________. Select... report the equipment's current market value on the balance sheet allocate the...
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...
assumption often use the account LIFO __________ to report the amount by which inventory cost would have been higher under FIFO. 14. Generally, the amount reported in the Inventory account will be the __________ of the...
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 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...
. The merchandise held by a retailer is usually in the Inventory account at which amount? Select... Cost Sales value 22. Which inventory system will reduce the general ledger account Inventory and increase the general...
delivery truck would be recorded in a sales journal and in the account Sales. Select... True False 17. If equipment used in the business is sold for cash and the amount is more than its book value, a gain is recorded....
the inventory Cost of deterioration and obsolescence of the inventory items Some of the costs listed are a function of the cost or value of the inventory, while some are based on the physical size of the items being...
reporting at cost is the general rule, inventories must be reported at less than cost in certain situations. For example, some inventories will have to be reported at their net realizable value when it is less than...
as a separate cost. Examples of Implicit Costs and Explicit Costs Let’s assume that a company gives a promissory note for $10,000 to a seller of a unique used machine for which the fair value is unknown. The...
) as of the final moment of an accounting period in accordance with generally accepted accounting principles (GAAP, US GAAP). GAAP’s historical cost principle means that some noncurrent assets are reported at amounts...
by reading our Financial Accounting (Explanation). 1. Financial accounting is focused on the __________ financial statements of a company. External Right! Internal Wrong. 2. Financial statements report the fair market...
above, being proficient in accounting software such as QuickBooks will increase your value. You can find online video instruction at lynda.com or you may also find courses on QuickBooks being taught at a local technical...
credit balance A debit to Loss on Sale of Asset for $4,500 (received $5,000 for an asset having a book value of $9,500) A credit to Equipment for $50,000 Below is a summary of how the balance in Accumulated Depreciation...
__________ for the customer. 18. A value __________ shows the business activities or functions starting with research and development and ending with customer service. 19. A __________ chain shows the path from the...
displays for its store at a cost of $120,000. The displays have a useful life of 10 years and will have no salvage value. The straight-line method of depreciation will result in depreciation of $1,000 per month...
is an example of a variable expense. 3. Property taxes and rent are often fixed expenses. True Right! Property taxes do not vary with sales. Rather they are fixed, because they are based upon an assessed value of the...
in the market value of the asset The sum of the depreciation expense recorded since the asset was purchased 11. A credit balance in the account Allowance for Doubtful Accounts should indicate which of the following?...
These are positive income statement amounts that are not revenues. One of these occurs when plant assets are sold for more than their book value. gains These are positive income statement amounts that are not revenues....
balance a debit entry is needed. Stockholders’ (or Owner’s) Equity Accounts Will Have Credit Balances Some examples of stockholders’ (or owner’s) equity accounts include: Common Stock Paid-in Capital in Excess...
of accounting. Example of Book Depreciation Let’s assume that equipment used in a business has a cost of $500,000 and is expected to be used for 10 years. If the company assumes no salvage value at the end of the 10...
of __________ service or support departments. 5. To be in compliance with generally accepted accounting principles, selling and administrative expenses and interest expense should be allocated to the cost of products...
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...
. DISCONTINUED NOUDISDETCIN Unscramble DISCONTINUED NDDOSUNEITCI Unscramble 15. If a corporation sells a plant asset for less than its ___________ value, the difference will be reported as a loss on the income statement....
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