entries. REVERSING ERIGNEVSR Unscramble REVERSING ERVGNIRES Unscramble 10. An income __________ account might be used when transferring the balances from the income statement accounts to an owner's equity account....
entries. REVERSING ERIGNEVSR Unscramble REVERSING ERVGNIRES Unscramble 10. An income __________ account might be used when transferring the balances from the income statement accounts to an owner's equity account....
liability until it is moved from the balance sheet to the income statement as an expense. This is done to achieve the accountants’ matching principle. Examples of Deferred Expenses Let’s assume that a large...
What is the entry when merchandise has been received but not the vendor's invoice? Definition of Merchandise Received but Not Vendor’s Invoice If a retailer receives merchandise from one of its vendors, but has...
as follows: Debit Cash for $1,060,000 (the amount received from investors) Credit Bonds Payable for $1,000,000 (the face, par, and maturity amount) Credit Premium on Bonds Payable for $60,000 (the amount to be...
from customers (if the checks are not postdated) Petty cash Cash equivalents, such as U.S. Treasury Bills which were purchased within 90 days of their maturity Temporary investments, such as certificates of deposit...
What is treasury stock? Definition of Treasury Stock Treasury stock is usually a corporation’s previously issued shares of common stock that have been purchased from the stockholders, but the corporation has not...
could clear (be paid from) the bank account prior to that date. Post-dating a check makes sense only if you are certain that the payee will not cash or deposit the check before the date appearing on the check. Example...
What is the three-way match? Definition of Three-Way Match In the accounting and bookkeeping area of accounts payable, the three-way match refers to a procedure used when processing an invoice received from a vendor or...
automatically and only require information on the other account. Examples of Double Entry When a company borrows money from a bank, the company’s asset Cash is increased and the company’s liability Notes Payable or...
expense account to record the amounts that employees paid toward the company’s health insurance costs. For instance, the company might debit its expense account 4210 Employee Health Insurance Expense when recording...
amount, since reducing inventory has a positive effect on the company’s cash balance.) Additional Information The change in the inventory is reported as an adjustment to the company’s net income in the cash from...
How does the aging of accounts receivable determine bad debts expense? Definition of Aging of Accounts Receivable The aging of accounts receivable sorts the amounts that a company is owed (from customers who had...
costs of a retailer and the product costs of a manufacturer are also referred to as inventoriable costs, since the product costs are used to value their goods in inventory. When the goods are sold, the product costs...
products or services are __________ __________ each other. Select... different from similar to 11. The numerator in the calculation of a predetermined overhead rate is the __________ amount of factory overhead....
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 Present Value of an Ordinary Annuity uses the appropriate present value factors for discounting a stream of equal cash amounts occurring at equal time intervals. An important feature is the use of loan...
Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page. 1. If the units produced vary significantly from each other, a __________ costing system may be more...
Our Explanation of Bonds Payable covers the recording of bonds, the accrual of interest expense, and the amortization of the discount and premium on bonds payable. You gain an understanding on why the market value of...
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...
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...
receivable turnover ratio is __________. (Round to the nearest whole number.) 11. If a company offers credit terms of net 30 days, it is likely that its receivables turnover ratio will be no greater than __________....
) that is withheld from employees' salaries and wages up to a specified annual amount is __________ 6.2%%. 3. The combined rate for the Social Security tax and the Medicare tax to be withheld from each...
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
Our Explanation of Bonds Payable covers the recording of bonds, the accrual of interest expense, and the amortization of the discount and premium on bonds payable. You gain an understanding on why the market value of...
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...
What is income smoothing? Definition of Income Smoothing Income smoothing involves reducing the fluctuations in a corporation’s earnings. The reductions in fluctuations can result from some legitimate business methods...
on the traditional method of allocating factory overhead for pricing decisions, the company may demand that the customer pay more for the product that required no additional activities. If the customer refuses to accept...
is foregoing a salary of $40,000 from another company, this is an implicit cost. When considering this implicit cost, Jane is losing $10,000 by working in her proprietorship. If Jane operated her business as a...
How is the material usage variance account reported on the financial statements? Definition of Materials Usage Variance The materials usage variance (in a standard costing system) results from using more or less than the...
or question into the search box located at the top of any page of AccountingCoach. The search results will provide the info you need. Take time to read our Explanations Read/review any of our 30+ Explanations. Many...
answers only one question: How long before the cash invested is returned? The payback method does not address which investment is more profitable. Note from our examples that the payback method not only ignores the time...
sold divided by the average inventory 11. Which of the following is a cost of holding inventory? Select... Preparing the purchase order Risk of obsolescence Receiving and stocking the goods ordered from a supplier 12....
manufactured. This is often done by using a predetermined overhead rate. The predetermined rate is likely based on the amount from the annual manufacturing overhead budget divided by some activity such as the expected...
the cost per unit. If there are 80 units in inventory at the end of the accounting period, the cost of the ending inventory and the cost of goods sold (using the periodic inventory system) are as follows: Amount from...
, this can also mean an unfavorable variable overhead efficiency variance. If the volume of output is curtailed by the quality of the materials, there could possibly be a fixed overhead volume variance. Companies should...
What is net working capital? Definition of Net Working Capital Net working capital is the amount (as opposed to being a ratio) remaining after subtracting a company’s total amount of current liabilities from its total...
on a long-term loan is usually recorded in an account which is separate from the account containing the principal amount. Select... True False 20. A lawsuit has been filed against a company. Even if the company’s...
What is gross margin? Definition of Gross Margin Gross margin is the amount remaining after a retailer or manufacturer subtracts its cost of goods sold from its net sales. In other words, gross margin is the retailer’s...
and the current year’s ending inventory is $115,000. Under the periodic inventory system, this inventory increase of $15,000 could be recorded as a debit of $15,000 to Inventory (thereby increasing the account balance...
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