, Products X & Y cause very little overhead cost in relation to the main, complicated, lower volume products.) If management responds to the high allocated overhead costs for Products X & Y by seeking price...
, Products X & Y cause very little overhead cost in relation to the main, complicated, lower volume products.) If management responds to the high allocated overhead costs for Products X & Y by seeking price...
balance in the contributed capital account Common Stock. After several accounting periods, the amounts in the asset accounts will change from the depreciation of the building and from hundreds of other transactions....
remain in inventory at the end of the year. Using FIFO the company assumes that first costs (the oldest costs) for 70 units will be removed from inventory and will become the cost of goods sold. Therefore, the FIFO cost...
order costing is a system used to collect and assign manufacturing costs to units that vary from one another.) Example of Process Costing Let’s assume that a company manufactures large quantities of an identical...
. If the retailer records the $7,000 of purchases as an expense (cost of goods sold), then at the end of the year the retailer’s adjusting entry must debit Inventory for $100 (since the inventory has increased from...
. (It was $147,000 for 2022.) This means that in the year 2023, only the first $160,200 of an employee’s gross wages, salaries, bonuses, etc. (or self-employed’s business earnings) will be subject to the Social...
in net income. Since the internet business was not purchased from another company and its cost to develop was not significant, the company’s balance sheet will report only the business’s cash, receivables and some...
of goods sold on its income statement. For the minor change in the cost of inventory from the beginning to the end of the accounting period, an adjustment can be made. For example, let’s assume that the cost of...
margin from scarce resources is known as __________ programming. 14. One of the benefits of the Program and Evaluation Review Technique (PERT) is the identification of the __________ path. 15. The __________ curve...
to the company’s balance sheet where it will be reported as a liability. The title of the general ledger liability account may have the title of Unearned Revenues, Deferred Revenues, or Customer Deposits. As the...
Should inventories be reported at their cost or at their selling prices? Definition of Inventory Cost Inventories are reported at cost, not at selling prices. A retailer’s inventory cost is the cost to purchase the...
corporations. RSTCorp is referred to as the parent company and the other three corporations are referred to as subsidiaries. The combination or group of the four corporations is referred to as the economic entity. It is...
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...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
Other 6. Balance sheet amounts represent __________ __________ __________ time. Select... an interval of a moment in 7. Income statement amounts represent __________ __________ __________ time. Select... an interval of...
of the following elements of financial statements for each of the items 21 - 30: Each element can be used several times. The questions are taken from or are based on information contained in the FASB's Statement of...
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...
are required by the __________ principle. 6. The adjusting entry for depreciation will include a debit to Depreciation Expense and a credit to __________ __________. 7. Adjusting entries help to convert accounting...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
receiving ticket/record Some companies use an internal form known as the accounts payable voucher to which the above documents are attached. 3. On January 3, AVCO received a shipment of goods from a...
statements for the following reasons: The balance sheet line-item Accounts receivable – net will report a more realistic amount that will be turning to cash. The income statement line-item Bad debts expense will...
, net 30 This invoice term indicates that the net amount (after any return or allowance) is due within 30 days. However, 1% can be deducted if the invoice is paid within 10 days. Mark as wrong Mark as right QuickBooks...
that will be the same amount under two alternative proposals are not relevant when selecting one of the proposals. In other words, the expenses that are the same could be omitted from both alternatives without affecting...
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
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...
a company’s financial statements. adjusting entry This type of journal entry is used to accrue or defer amounts prior to preparing a company’s financial statements. Mark as wrong Mark as right closing entries These...
, or that the account was credited. It is important that you do not think that a debit is “good” or “bad”. Similarly, you should not think of a credit as being “good” or “bad”. Account An account is a...
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...
to acquire and install a new computerized system for controlling its operations. The new system’s general ledger might result in a chart of accounts which is different from the previous chart of accounts. Join PRO to...
One component of the payroll tax referred to as FICA. (The other component of the FICA tax is the Medicare tax.) The Social Security tax is levied by the U.S. government on both the employee and the employer. In 2024 the...
the paperwork for a company’s transactions and getting the information quickly and accurately recorded in the company’s general ledger accounts. Today, this is done best through the use of cost effective software...
be referred to as a deferred charge. Example of a Deferred Asset Assume that an electric utility spent $300,000 for a project before it had to be abandoned. The state regulators ruled that the utility may recover the...
How do you amortize goodwill? Definition of Amortize Goodwill Prior to 2001, to amortize goodwill meant to consistently and in uniform increments move the reported amount of the intangible asset goodwill from the balance...
the check was written and recorded. The problem was the previous bank statements. The bank statement balances were too high since the check had not yet cleared the bank checking account. That’s why we subtract the...
costs; what the costs should be) the company is on track to reach the cost part of its profit plan. If the actual costs deviate from the standard costs, management is alerted by the variances that are reported for...
that the company is experiencing actual costs that are different from the company’s plan. Standard costing systems report a minimum of two cost variances for each of the following manufacturing costs: Direct materials...
-K. Example of Form 10-K You can review a Form 10-K by doing an online search for a corporation with publicly-traded shares of common stock. On the corporation’s website, select Investor Relations, and from that page...
At what point are revenues considered to be earned? Revenues, which are derived from an entity’s main activities such as the sale of merchandise or the performance of service, are considered to be earned when the...
What is the purpose of assigning accounts receivable? The purpose of assigning accounts receivable is to provide collateral in order to obtain a loan. To illustrate, let’s assume that a corporation receives a special...
What is the difference between an invoice and a voucher? Definition of an Invoice An invoice received from a vendor is a billing for goods or services that it had provided. The vendor’s invoice will include the...
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