include long-term investments and unamortized bond issue costs. 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...
include long-term investments and unamortized bond issue costs. 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...
of $100 and its current asset Prepaid Insurance will report $500. The prepaid amount informs the readers of the December 31 balance sheet that the company will not have to pay $500 in cash for insurance during the next...
equity. 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 your skills to re-enter the workforce...
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with its suppliers, the company will have the benefit of having a larger cash balance (even though the amount of working capital will not change). Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
is that the current asset Cash increased by $50,000 and the current liability Loans Payable increased by $50,000. If a company collects $30,000 of its accounts receivable, there is no change in working capital since the...
, and an accountant might add “…and charge Advertising Expense for $300.” Another accountant might say “…and debit Advertising Expense for $300.” Join PRO to Track Progress Mark the Question as Read...
obligations when they come due. 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 your skills to...
-time employee, so the company’s December 31 balance sheet must report a current liability of $3,120. Vacation pay is an example of an accrued expense and an accrued liability that is required by the matching...
been disposed of in the middle of October and one-half month of depreciation is taken for October. If an asset is disposed of on October 3, it is also assumed that the asset was disposed of in the middle of October...
inventory such as the cost of capital, space, insurance, etc. 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...
of the debit balance in Accounts Receivable is unlikely to be collected. A less common example of a contra asset account is Discount on Notes Receivable. The credit balance in this account is amortized or allocated to...
car, you might ask “May I borrow you car? or “Will you lend me your car?” If your friend agrees, you are borrowing your friend’s car and your friend is lending his or her car. Join PRO to Track Progress Mark the...
into service, the project’s accumulated costs will be removed from the Construction Work-in-Progress account and will be debited to the appropriate plant asset account. Join PRO to Track Progress Mark the Question as...
consist of the following: Property, plant and equipment (fixed assets) Long-term investments Intangible assets Deferred charges and other noncurrent assets Join PRO to Track Progress Mark the Question as Read Must-Watch...
cost, appraised value, and assessed value amounts range from $150,000 to $270,000. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career...
. A deferred credit is reported as a liability on the balance sheet. Depending on the specifics, the deferred credit might be a current liability or a noncurrent liability. In the past, it was common to see a noncurrent...
between divisions or subsidiaries of a large company. 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...
account. 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 your skills to re-enter the workforce...
year divided by 12 months per year). The combination of the monthly amortization of $2,000 and the monthly interest expense of $30,000 results in total monthly interest expense of $32,000 for each of the 60 months...
shares trading at $20 per share (which also results in a total market value of $1.6 million). Prior to the reverse stock split, small investors were able to purchase 100 shares for just $200. After the stock split, an...
markets such as private placements for stocks, bonds, and other debt. 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...
solvency is also at risk if it is unable to operate profitably. I suspect that the definition of solvency varies among people in the same country and from country to country. You should check the legal system in your...
assets Current liabilities Noncurrent or long-term liabilities Stockholders’ (or owner’s) equity Example of Classified Balance Sheet A condensed version of a classified balance sheet is shown here: Join PRO to Track...
balance of $4,000. 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 your skills to re-enter the...
of 0.6:1. A corporation with total liabilities of $1,200,000 and stockholders’ equity of $400,000 will have a debt to equity ratio of 3:1. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn...
the detailed information on revenues and expenses that would be available under the transaction approach. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and...
. There is no accrual for the principal portion of the loan payment. The principal balance of the loan is not reduced until the actual principal payment occurs. Join PRO to Track Progress Mark the Question as Read...
that the house will cost $225,000. Since the customer (the daughter) and the company are related parties, the transaction is not an arms length transaction. As a result, the daughter is able to get the house for less...
as of December 31. The customer’s (buyer’s) purchase, payable, and increase in inventory will occur on January 2.] Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your...
will also reduce the credit balance in the accumulated depreciation account. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform...
by reading our Nonmanufacturing Overhead (Explanation). 1. Selling expenses should be allocated to the cost of goods sold for external financial reporting. True Wrong. False Right! 2. According to U.S. accounting...
on the statement of cash flows in the section entitled cash flows from ______________ activities. OPERATING AOIGTNERP Unscramble OPERATING TNOGPAIER Unscramble 17. If inventory increases during the accounting period,...
What is a budget variance? A budget variance results when an actual amount is different from a planned or budgeted amount. A budget variance can occur for revenues and for expenses. Join PRO to Track Progress Mark the...
What is a/c? Definition of a/c In accounting, a/c is the abbreviation for account. Example of a/c An accountant might leave the following note for a subordinate: “Please review the balance in the...
What is OEM and EOM? OEM is the acronym for original equipment manufacturer. EOM is the acronym for end of month. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting...
How do you account for the rebate on an automobile? The rebate on the purchase of an automobile should be recorded as a reduction of the automobile’s cost. The lower automobile cost will result in lower depreciation...
What is a debenture? A debenture is an unsecured bond. In other words, a debenture is a bond without a lien on specific assets owned by the issuing corporation. Join PRO to Track Progress Mark the Question as Read...
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
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