liability account Wages Payable is increased. When the employee is paid, the account Wages Payable is decreased and Cash is decreased. When a company’s software prepares a check, the software will automatically reduce...
liability account Wages Payable is increased. When the employee is paid, the account Wages Payable is decreased and Cash is decreased. When a company’s software prepares a check, the software will automatically reduce...
(usually in the form of a check or currency). Some payments are current period expenses (e.g. current month’s rent payment) but many payments are not expenses of the current period. Examples of Expenses and Payments...
, there is $6.00 on hand and there are $93.00 of petty cash vouchers. This indicates a shortage of $1.00. Using the above information, the journal entry to replenish the petty cash fund will include a credit of $94.00 to...
How do you balance a checkbook? Definition of Balance a Checkbook To balance a company checkbook means comparing the amounts on the bank statement (or other bank account detail) to the amount in the company’s...
. (For an individual, the book balance is likely to be the balance appearing in the person’s check register.) It is common for the book balance to not agree with the balance on the bank statement as of the same day....
roots in manufacturing businesses. However, today it extends to service businesses. For example, a bank will use cost accounting to determine the cost of processing a customer’s check and/or a deposit,...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
credit terms of 2/10, net 30. The invoice is for $1,000 but $100 of the goods were returned within two days as instructed by the supplier. The amount to be remitted to the supplier within the discount period is...
. A $2,000 invoice from a supplier for goods has terms of 1/10, n/30. If $100 of the goods were returned to the seller, the amount to be remitted within the discount period is $__________ $1,881 [$1,900 - (0.01...
Why does the internal rate of return equate to a net present value of zero? Internal rate of return and net present value are discounted cash flow techniques. To discount means to remove the interest contained within the...
. Mark as wrong Mark as right unearned revenues (or) customer deposits These are liabilities until they are earned by the company receiving them or until they are returned to the customer. unearned revenues (or) customer...
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 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 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...
receives the money from its customer that was billed in the prior month, which account should be credited? Select... Accounts Receivable Cash Sales 16. When a company records a check for its monthly rent, the account...
is the __________ chart of accounts. 6. When a check is written, a cash account should be __________. Debited Wrong. Credited Right! 7. Liability accounts will normally have __________ balances. Debit Wrong. Credit...
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...
. It is common for inexpensive, yet sophisticated accounting software to use the double-entry system, however, it may prompt you for only one account name or number. For example, if the software prepares a check, it will...
, __________ manufacturing overhead rate is often used. Select... an annual a monthly 22. The costs transferred from a manufacturer’s work-in-process inventory to its finished goods inventory is the cost of goods...
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...
Expense, Wages Expense, and Advertising Expense are expected to have __________ balances. Select... debit credit 8. A sole proprietor’s Drawing Account will likely have a __________ balance. Select... debit credit 9....
journal Trial Balance 2. The bookkeeping or accounting equation is __________ = liabilities + owner’s equity. 3. When a company pays a bill by writing a check, the company should __________ a Cash account. Select......
to the electricity bill that was paid this month, if that bill is for the previous month’s electricity usage. Check the meter reading dates on the bill to be sure the dates of the electricity usage agree with the...
Our Explanation of Chart of Accounts shows how a typical chart of accounts is organized and examples of possible account numbering. It concludes with a quick review of debits and credits.
a bill by writing a check, the account Cash is __________. Select... credited debited 19. The account that is debited when a sole proprietor withdraws some of the business’s cash for personal use is __________....
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...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
. In the bank statement reconciliation a bank charge for check printing will require a __________ entry to one of the company’s cash accounts. Select... debit credit 32. When preparing a bank reconciliation which is...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
Our Explanation of Evaluating Business Investments compares four of the techniques for reviewing potential capital expenditures. You will be introduced to accounting rate of return, payback, net present value, and...
, the recovery of a previously written-off accounts receivable will include a credit to which account? Select... Allowance for Doubtful Accounts Cash 27. A credit sale of $1,000 is made with terms of 2/10,...
expect to receive if the buyer pays on June 8? $720 Wrong. $784 Wrong. $792 Right! $800 minus 1% of $800 = $800 minus $8 = $792. $800 Wrong. 3. On June 1, $800 of goods are sold with credit terms of 1/10,...
. However, the software may require that you enter only the account and amount to be debited. For instance, when a check is written, the software will automatically credit the Cash account and therefore you need only...
of accounting. If the company uses its business credit card to pay for an expense of $5,000 instead of writing a check, will the company’s total amount of working capital end up being the same? Select... Yes No View...
Our Explanation of Break-even Point illustrates how to determine the number of units or sales dollars that will result in zero net income. The techniques rely on a product's contribution margin or contribution margin...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
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For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
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