Discounts Lost is an income statement account similar to Interest Expense, since it implies that JAYCO did not have the money to pay the vendor the cash price by February 15. Any amount in the Purchases Discount Lost...
Discounts Lost is an income statement account similar to Interest Expense, since it implies that JAYCO did not have the money to pay the vendor the cash price by February 15. Any amount in the Purchases Discount Lost...
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...
that will cause the unpaid principal balance to decrease each month so that the principal balance will be zero at the time of the final payment Although the total amount of each monthly payment remains the same,...
What is a deferral adjusting entry? Definition of Deferral Adjusting Entry A deferral adjusting entry (one of three types of adjusting entries) pertains to a transaction that has already been recorded in the general...
closer to the time of the sale or service, and The balance sheet will report a more realistic net amount of accounts receivable that will actually be turning to cash The allowance method can be applied in one or both of...
account. The income statement account Bad Debts Expense was affected earlier when the Allowance balance was established or adjusted. For financial reporting purposes the allowance method is preferred since it means the...
time making the component. On the other hand, if your plant is operating at full capacity, you would have to forego the profit on some items presently being produced (an opportunity cost) in order to make the...
What is net sales? Definition of Net Sales Under the accrual basis of accounting, net sales is the total amount of goods shipped/delivered to customers during a specified period of time minus any early payment...
and the coolers were empty–what a perfect time to measure the profits for the seven day period that just ended. I suggested that we establish the workweek for payroll to be Tuesday though Monday and we replace the...
profit). Example of Gross Profit Method Assume you need to estimate the cost of a company’s July 31 inventory. The last time the inventory was calculated was seven months earlier on December 31 when it had a cost of...
under the heading of other income. Calculating a Gain To illustrate the calculation of a gain, let’s assume that the retailer sells its old van for $5,000 cash. At the time of the sale the van is on the retailer’s...
for working on the job will be 1,880 hours per year (2,080 hours minus 200 hours) multiplied by $20 per hour = $37,600 for a year. Next let’s assume the following are the annual costs for the fringe benefits earned by...
Is sales tax an expense or a liability? Definition of Sales Tax In the U.S., a sales tax is a state tax (and possibly an additional city and/or county tax) that is paid by the buyer at the time of purchase. The...
income statement as the cost of goods sold. The goods that are unsold at the end of the accounting period must be reported on the retailer’s balance sheet as inventory. Accounting for the Goods Purchased There are two...
liabilities when they come due. For example, if a company’s current assets consist mainly of slow-moving inventory and some slow-paying accounts receivable, the company may not be able to convert its current assets to...
, between a company’s balance sheet date of December 31, 2023 and the time that the financial statements are distributed on January 31, 2024, it is possible a significant event occurs or information becomes known that...
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...
will not be involved in the accounting entries made at the time when the payment is received? Allowance For Doubtful Accounts Wrong. Accounts Receivable Wrong. Bad Debts Expense Right! 25. Under the direct write off...
time it takes for a retailer’s cash to go into inventory and then return to cash is known as the __________ cycle. 4. The amount of credit sales for a year divided by the average balance of accounts receivable is the...
the asset Cash and will __________. Select... increase another asset reduce owner's equity in 2023 23. Recording revenues when they are earned rather than when the money is received is part of which basis or method...
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 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...
. An accrued expense is one where the amount has already been paid. Select... True False 10. Deferred revenues are those where the money has already been received. Select... True False Use the following information for...
! Owner's (Stockholders') Equity is not involved in this transaction. 5. The company repays the bank that had lent money to the company. Assets Increase Wrong. Decrease Right! The company's asset account...
in the market value of the asset The sum of the depreciation expense recorded since the asset was purchased 11. A credit balance in the account Allowance for Doubtful Accounts should indicate which of the following?...
is an example of a variable expense. 3. Property taxes and rent are often fixed expenses. True Right! Property taxes do not vary with sales. Rather they are fixed, because they are based upon an assessed value of the...
Our Explanation of Manufacturing Overhead gives you examples of what is included in manufacturing overhead. You will learn that these are indirect product costs and therefore are allocated to the products in order to...
to employees for the overtime hours. To illustrate, let’s assume that a company pays “time-and-a-half” for hours worked that are greater than 40 hours during the work week. If an employee earns $9 an hour (the...
$5 per hour that a person earning $10 per hour will receive when working more than 40 hours in a week. It is also known as the “half” in “time and a half.” overtime premium This is the additional $5 per hour...
of accounting. Example of Book Depreciation Let’s assume that equipment used in a business has a cost of $500,000 and is expected to be used for 10 years. If the company assumes no salvage value at the end of the 10...
of __________ service or support departments. 5. To be in compliance with generally accepted accounting principles, selling and administrative expenses and interest expense should be allocated to the cost of products...
owned by a company that have future value which can be measured. assets These are the resources owned by a company that have future value which can be measured. Mark as wrong Mark as right liabilities These are a...
monthly revenue budgets will vary by the number of days of worship in the month, the time of year, and other factors. As a result, an annual budget of $370,000 might consist of the following sequence of monthly...
accounts. The aging lists every customer’s balance and then sorts each customer’s balance according to the amount of time since the sale(s) occurred. The most recent sales are assumed to be fully collectible, but...
organization's statement of activities reports the change in its net __________ during a specified period of time. ASSETS ESTASS Unscramble ASSETS STAESS Unscramble 14. A classification of supporting services...
the employee worked four 8-hour days and one 10-hour day. Assuming that overtime is paid at a rate of time and one-half, the employee’s total gross pay for the week is $__________. 8. The amount of each employee’s...
of __________ financial position. 4. The statement of __________ cash flows may be prepared under the direct or indirect method. 5. The nonprofit's financial statement that reports amounts as of a particular date...
depreciation, assume that a service business purchases equipment at a cost of $160,000. This asset is expected to have a useful life of 5 years at which time it will be sold for $10,000. This means that the total amount...
, closing, and some adjusting entries. Think of performing a service for cash. You would debit Cash because you received cash and you would need to credit an account, because of double entry. Since you are earning the...
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