. for $5,200 Credit the balance sheet account Allowance for Doubtful Accounts for $5,200 To gain more insight on this topic go to AccountingCoach.com’s explanation of Adjusting Entries, Part 1. Join PRO to Track...
. for $5,200 Credit the balance sheet account Allowance for Doubtful Accounts for $5,200 To gain more insight on this topic go to AccountingCoach.com’s explanation of Adjusting Entries, Part 1. Join PRO to Track...
the insurance company’s invoice, the current liability account will be debited for $75. Either technique will result in the company having an expense for $225 per pay period for the employee. Join PRO to Track...
. 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 Pass...
of its $10,000 in Accounts Receivable. This example points out the possible risk of selling goods or providing services with credit terms. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How...
the credit memo, the following will occur in its accounting records: 1) a debit of $8 to Accounts Payable, and 2) a credit of $8 to Purchases Returns and Allowances (or to Inventory). Join PRO to Track Progress Mark the...
performed by bookkeepers. The accounting clerks are usually supervised by an accountant. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career...
cost is more likely to be used. Knowing how costs behave is important for decision making. For example, a manufacturer will want to know how its costs will increase if a new product line is added (or how costs could...
computing the staff turnover, be sure to discuss the staff turnover rate with the company’s management. Training new employees only to have an above average person leave after the training period is very expensive....
prepare a balance sheet as of the end of each day, you will need to make daily adjusting entries in order for the balance sheet to be meaningful. For example, each day more electricity is used and therefore each day...
. This is the reason for having an independent person prepare the bank reconciliation. Since electronic deposits and electronic withdrawals (charges) are so common, it is important that the bank reconciliation be...
, the entry to record the stock dividend will be a debit of $250,000 to Retained Earnings and a credit to a paid-in capital account such as Common Stock. It is important to note that dividends are not expenses and...
, the commissions earned will be reported as part of other income.) 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 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...
savings will partially offset the interest expense on the 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 your...
. Therefore, an adjusting entry must be recorded as of December 31 to credit Prepaid Expenses for $1,000 and to debit Insurance Expense for $1,000. The same adjusting entry must be recorded as of the last day of January,...
of $2,000 (November’s and December’s interest of $1,000 each month). Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better...
to this unfavorable cost variance as a materials purchase price variance. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better...
flow was $75,000. Occasionally, dividends paid to stockholders during the recent year are also deducted in calculating free cash flow. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
will be collected Using the account Allowance for Doubtful Accounts is preferred for financial reporting. However, it is generally not allowed for U.S. income tax reporting. You should always consultant with a tax...
in the average if most customers are remitting the amounts by the dates the receivables are due. Therefore, it is best to review an aging of accounts receivable by customer to understand the detail behind the days’...
will not be due within one year of the balance sheet date. You can find the amount of principal due within the next year by reviewing the loan’s amortization schedule or by asking your lender. Join PRO to Track...
margin Return on assets Return on stockholders’ equity The inventory turnover ratio will be greater when LIFO is used during periods of increasing costs. The reason is that the cost of goods sold will be higher and...
account Accrued Expenses (or Accounts Payable). (On June 13, the company will credit Cash and will debit the liability account.) Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance...
, Accumulated Depreciation, Notes Payable, Accounts Payable, Payroll Taxes Payable, Paid-in Capital, Retained Earnings, and others. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
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...
for $800 and will credit Cash for $800. The weekly payroll processing will result in a credit of $100 to Advance to Employees (thereby reducing by $100 the amount credited to Net Payroll Payable). Join PRO to Track...
(and the costs are as planned) the fixed manufacturing overhead will be underabsorbed. When the actual volume exceeds the planned volume (and the costs are as planned) the fixed manufacturing overhead will be...
bank with the notation: Returned due to not sufficient funds. 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 contra accounts that will result in the balance sheet totals being different from the post-closing trial balance totals include: Allowance for Doubtful Accounts Discount on Bonds Payable Bond Issue Costs Owner’s...
the cost/benefit test. 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...
checking 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...
discloses the amount of interest paid, the amount of income taxes paid, and significant investing and financing activities that did not require the use of cash. Join PRO to Track Progress Mark the Question as Read...
, product line, and so on. Nonoperating expenses which pertain to a company’s incidental activities. A common nonoperating expense for a retailer is interest expense. Join PRO to Track Progress Mark the Question as...
in the owner’s capital account and owner’s 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...
to a liability account a debit to an expense account if the employees are not involved in the manufacturing of products. (The FUTA tax for employees in the manufacturing departments is recorded in an account associated...
should consult with your accounting and tax professional as well as an attorney regarding the type of business structure to be used and the pros and cons of investing versus lending to a new business. Join PRO to Track...
for the principal to be received after one year. 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...
(or product cost) is $17. The $17 will be part of the manufacturer’s inventory until it is sold. When it is sold, the $17 will be removed from inventory and will become part of the manufacturer’s cost of goods sold....
institutions often have fiscal years that begin on July 1 and end on the following June 30. A U.S. retailer can have a fiscal year consisting of 52 weeks that begins on the Sunday closest to February 1 and ends on the...
in the bank’s liability account is reduced by a debit. In the company’s general ledger, the bank debit memo will reduce the company’s checking account (which is an asset) and will require the company to credit its...
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