that make up the amount of accumulated other comprehensive income include the following: Unrealized gains/losses on hedge/derivative financial instruments Foreign currency translation adjustments Unrealized...
that make up the amount of accumulated other comprehensive income include the following: Unrealized gains/losses on hedge/derivative financial instruments Foreign currency translation adjustments Unrealized...
overhead being assigned or applied to the unit through a burden rate. 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...
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...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
Our Explanation of Future Value of a Single Amount will show you the power of compounded interest on a single deposit. You will see how the future value tables can be useful as well as the rule of 72.
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 Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
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...
for the company’s profits. It will also be a factor why the company’s actual profits will be better than the budgeted profits. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
%) Preferred stock cost of $0.7 million ($10 million X 7%) Common stock cost of $7.5 million ($50 million X 15%) Equals a total cost of $9.8 million which divided by $100 million is 9.8% Join PRO to Track Progress Mark...
-in-process, finished goods, manufacturing and packaging supplies Office supplies Prepaid expenses, such as insurance premiums which have not yet expired Advance payments on future purchases Join PRO to Track Progress...
(and its contra account) is recorded in the account Bad Debts Expense which is reported on the income statement as part of the operating expenses. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
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...
in inventory will be 25@$22. 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...
of depreciation has been taken (and the book value will be $25,000). The units of activity method of depreciation is also referred to as the units-of-production method. Join PRO to Track Progress Mark the Question as...
. If it hires a new employee at an annual salary of $52,000 the employee will be earning $2,166.67 ($52,000 divided by 24 paydays) during each semimonthly pay period. The employee’s pay records will indicate a gross...
or increase the present cash dividend The above considerations could mean that dividends will not be increased even though the corporation has a huge amount of retained earnings. Join PRO to Track Progress Mark the...
, goodwill, etc. that were acquired in a transaction. Deferred charges. This category is used for items that do not fit into the other long-term asset classifications. Join PRO to Track Progress Mark the Question as Read...
as the truck is “used up” in the company’s revenue-generating activities. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform...
and will not be reported on the income statement or in an income summary account. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform...
receivable for any interest that has been earned but not received as of the end of each accounting period Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and...
sold shown on the income statement. 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...
the related revenue being reported. Therefore, at each balance sheet date, the utility must accrue for the revenues it earned but had not yet recorded. This is done through an accurual adjusting entry that debits a...
to the truck. The $30,000 cost increases the company’s assets, but will be reduced by depreciating the cost to expense over the next 5 years. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn...
and too much in owner’s (or stockholders’) 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...
will be deficient when measuring a company’s operating income. Clearly, the calculation of operating income cannot omit the cost of goods sold. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
on which they were drawn. 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...
(rounded to a whole unit). 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...
in the notes to the financial statements. 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...
on the day of the transaction, the investor either buys the bond at a premium or doesn’t buy a bond. You will find another example of bond premium at...
inventory system, the cost of goods sold is readily available in the account Cost of Goods Sold. [It is possible that a company uses the periodic system in its general ledger, but uses a different computer system...
that debits $1,000 to Interest Receivable (a balance sheet account) and credits $1,000 to Interest Income (an income statement account). Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
accountants will compute the per unit cost to the nearest penny. 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 an asset used in the business 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...
, which is the net amount of the revenues, expenses, gains, and losses being reported. Example of Profit and Loss Statement The following is an example of the key elements of a profit and loss statement, which officially...
that companies using the periodic inventory system in their general ledger accounts often have sophisticated inventory systems outside of the general ledger for tracking the items it purchases, produces, sells and has...
a promissory note. This results in the company replacing its account payable with a note payable, and the supplier replacing its account receivable with a note receivable. Join PRO to Track Progress Mark the Question as...
(revenues, expenses, gains, losses) as temporary accounts because their balances will be closed and transferred to the owner’s capital account at the end of the year. Join PRO to Track Progress Mark the Question as...
of the equipment, the total amount of depreciation expense is likely to be the same. It is just a matter of timing as to when that total amount is reported on the financial statements versus the income tax returns. Join...
find it advantageous to use the periodic inventory system in its general ledger (instead of the perpetual inventory system) especially when it uses the LIFO cost flow assumption for valuing its inventory and cost of...
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For the past 52 years, Harold Averkamp (CPA, MBA) has
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