Adjusting Entries is a way to adjust or correct the balances of financial statements. For instance, the company uses the expense method of accounting for stationery and supplies accounts. Moreover, rentals and insurance. Normally, if the company uses the expense method, it records all the purchases of stationery and supplies as an expense. As well …
Bonds payable is a debt instrument. The issuance of bonds has an issuer, the debtor, and a holder, the creditor. The bonds certificate represents a promise to pay the sum of money at the maturity date. Moreover, the periodic interest is on the maturity amount (face value) at a specific rate. When the amount of …
Warranty is a liability account. Warranty is a permanent account meaning at the end of the reporting period, the liability is carried over to the next period. It is a promise of a seller to a buyer to make good on a deficiency of quantity, quality, or performance in a product. This is a way …
Liabilities are an obligation. When we say liabilities, it is an obligation arising from either a contract, law, or a promise to pay. Now, what are the requirements for an obligation to be recorded as a liability to our financial statement? We have three requirements for an obligation to be included in the financial statement. …
This content will teach you how to record wasting assets and their depletion expense. Similar to depreciation and amortization, depletion is an expense account. It is a deduction to gross income. Some companies selling the resources while extracting record it as an inventory. This way of recording is acceptable. If this is the case, inventory …
This content aims to introduce you to change in accounting estimate. Several transactions are considered accounting estimate. Maybe you are wondering why it’s just an estimate. Moreover, maybe you have this question in your thoughts about how financial statements are reliable if some transactions are based on estimates. It is a good question to wonder. …
This content will teach you how bookkeepers/accountants record property, plant, and equipment transactions. The goal is to let you understand how the property, plant, and equipment presented in the financial statements turn out. This content provides illustrations of all the modes of acquisition. Especially the order of priority in determining the cost of PPE assets …
Key people in the company must know how to forecast revenue. Especially during an economic crisis or fortuitous events. Forecast revenue gives a picture of the company’s annual performance. Forecasting revenue differs in every business industry. Some business industry revenue forecast is accurate or close to reality. These are usually long-term investments, recurring subscriptions, rental …
What is class tracking in QuickBooks? Class tracking is a QuickBooks feature that allows the user to categorized income and expenses. Moreover, store locations (if more than one store), product lines, or departments. In addition, services offered (for the service industry that usually bill weekly/monthly) and partners or clients. The purpose of class tracking is …
10 Generally Accepted Accounting Principles (GAAP) are guidelines used in financial reporting. These are the standards, methods, and legalities of business in accounting. 10 GAAP Principles are important in accounting. It assures us of the reliability of financial statements. 1.) Principle of Regularity Talks about the principles that accountants should use systematic policies. Otherwise, rules …