Assume that a company incurred $10,000 of interest expense that has not yet been recorded as of December 31 (the final day of the accounting year). Therefore, a December 31 accrual adjusting entry will debit Interest...
Assume that a company incurred $10,000 of interest expense that has not yet been recorded as of December 31 (the final day of the accounting year). Therefore, a December 31 accrual adjusting entry will debit Interest...
the collection of the money owed to the company (part of the company’s accounts receivable and the customer’s accounts payable), the company’s invoice may state credit terms such as 2/10, net 30. For example,...
responsibilities are likely to be assigned to an accounts payable clerk, an accounts receivable clerk, and a payroll clerk. Generally, the bookkeeper (or accounting clerks) will not have a four-year accounting degree...
method is that the balance sheet will report the full amount of a company’s accounts receivable even though some are likely to be uncollectible. Because of the delay in reporting the bad debts expense on the income...
This type of entry has more than one account that is debited and/or more than one account that is credited. An example is a debit to Cash for $530, a credit to Sales for $500, and a credit to Sales Taxes Payable...
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
using the indirect method? A Decrease In Inventory Wrong. An Increase In Accounts Payable Wrong. An Increase In Accounts Receivable Right! Depreciation Expense Wrong. 17. Which of the following will appear as a positive...
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...
the asset Cash to increase by $10,000 and it will cause the liability Notes Payable or Loans Payable to increase by $10,000. The accounting equation remains in balance because both sides of the equation increased by...
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...
to pay its rent, the account Cash will be __________. Select... debited credited 18. The account Prepaid Insurance is expected to have this type of balance. Select... Debit Credit 19. When a company receives goods or...
is the __________ __________. 3. Assets that will turn to cash within one year are reported as __________ assets. 4. The use of accounts such as Accounts Payable, Accounts Receivable, and Deferred Revenues are...
... Accounts payable Accounts receivable Cash Inventory 6. Which of the following will result in an increase in the quick ratio? Select... Collection of an account receivable Sales of products on credit 7. Which of the...
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...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
current obligations. Mark as wrong Mark as right return on assets This ratio is computed by dividing a company’s after tax net income during a year by the company’s average total assets during the same year. return...
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...
This depreciation is found in a company’s general ledger accounts and financial statements and it is likely different from a U.S. company’s tax depreciation. book depreciation This depreciation is found in a...
... debit credit 5. A debit will __________ the balance in Accounts Payable. Select... increase decrease 6. The balance that you would expect in the account Accumulated Depreciation is a __________ balance. Select......
December 31 that debits Commissions Expense for $6,000 and credits Commissions Payable for $6,000. (Without the matching principle and the adjusting entry, the company might report the $6,000 of commissions expense in...
of the liabilities of the economic entity. (The amounts payable and receivable between NEP and MGC are eliminated in the consolidated balance sheet.) This is a very brief overview of consolidated financial statements....
the accounting period ends. Therefore, the company must prepare an adjusting entry dated for the last day of the month that debits Wages Expense and credits Wages Payable for the labor used and the amount owed....
RFPTIO Unscramble PROFIT IOFRTP Unscramble 13. Bonds payable will be reported as a long-term ____________. LIABILITY ILTIYABLI Unscramble LIABILITY AITLILBYI Unscramble 14. Financial statements are best prepared under...
. It is this cost that your company should report as expense on its June income statement. The amount of the utility bills with meter reading dates of June 30 should be reported as a current liability (accounts payable)...
to direct a reader’s attention to the disclosures included in the notes to the financial statements. Commitments are likely legal binding agreements for future transactions. If no amount is currently payable, there is...
the recording of the transactions, an accountant or the business owner will review the bookkeeper’s work and make the required adjusting entries before the company’s financial statements are distributed. (Larger...
statement account Repairs Expense for $6,000, and credits the balance sheet current liability account Accrued Expenses Payable for $6,000. Examples of other expenses that typically require an accrual adjusting entry...
is the electricity that is used in December where neither the bill nor the payment will be processed until January. The December electricity should be recorded as of December 31 with an accrual adjusting entry that...
value is not depreciated. However, it is common to assume that the salvage value will be $0. The depreciation method used for financial reporting is often different from the depreciation method used for U.S. income tax...
with the depreciation expense on the income tax return. Select... True False 8. The balance in the account Accumulated Depreciation should be approximately the same as the balance in the account Depreciation Expense....
restrictions. With Wrong. Without Right! 16. Contributions received from donors are reported on the statement of activities under the caption __________ revenues. 17. The Internal Revenue Service Form __________ 990...
depreciation is the declining-balance method often used for U.S. income tax depreciation.) Compared to the straight-line depreciation method, the sum-of-the-years’-digits method results in greater depreciation in the...
an asset’s cost to the periods in which it produces revenue. Select... an allocation a valuation 16. In a given year, the amount of depreciation expense reported on a company’s tax return can be more than the amount...
and the amounts will be included in net assets with donor restrictions. PERMANENTLY LPMNEATRNEY Unscramble PERMANENTLY NRNMELATEYP Unscramble 17. The IRS Form 990 must be filed by many nonprofit organizations which have...
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 Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
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...
costing This costing method allocates all manufacturing overhead costs (including fixed) to products manufactured. This method is required for external financial statements and income tax returns of U.S. companies....
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
Featured Review
"AccountingCoach has truly been a blessing, and has changed my life! I am a small-business owner and accountant. I became a PRO member because I am relatively new to the accounting industry, and the course offers instructions with detailed steps, answering the ‘why’ to all of my accounting questions. I can totally tell that this course was designed by an accountant, which makes it the absolute BEST! The materials are amazing; I can download tons of templates and Excel spreadsheets, view videos, and listen to MP3 audio files. I have really benefited from the materials in a great way. The quizzes build my confidence, while confirming that I am grasping and retaining the information. I love that I can always go back and search for a topic, and it comes right up so I can learn from the resources provided. This course has made me love accounting more than I ever dreamed!" - Ra'Chael B.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
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.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: