Although it is easier to use the cash method of accounting, the accrual method can reveal a company’s financial health more accurately. It allows companies to record their sales and credit purchases in the same reporting period when the transactions occur. Therefore, the accrual method of accoun...
Accrued Goodsrefer to unpaid supplies, equipment, or any other purchased goods that have been delivered, but the vendor hasn’t sent asales invoicefor. Journal Entries for Accrued Expenses Before we get into how to make a journal entry for an accrued expense, let’s briefly touch upon some ...
Therefore, when making a journal entry, you would debit $3,780 in your wages expense section and credit the same amount in your salaries payable section. Assuming the existing amount in the debit section of the wages expense account is $0, you would add the $3,780 to it. And the ending...
Accounts Receivable 125,000 Sales Revenue 125,000 Bad Debts Expense 12,500 Allowance...
Companies can boast record sales and still face an ominous financial future. How? The looming weight of liabilities. In accounting, liabilities refer to a company’s financial obligations to employees, suppliers, lenders, governments, and shareholders. Some liabilities need to be paid right away, ...
SOLUTION1:Tocompute:$500,000salesfor19X5x5%=$25,000 commissionspayablein19X5.$25,000payable–$21,000actually paid=$4,000accruedcommissions.Theadjustingjournalentryis: CommissionsExpense4,000 CommissionsPayable4,000 Toaccrue19X5commissions PROBLEM2:OnDecember31,SuCoreceivesa$740phonebillthat ...
The journal entry to record the receipt of payment within the discount period on a sale of $900 with terms of 2/10, n/30 will include: a. a debit to Accounts Receivable for $882. b. credit Sales Discounts for $18. c. credit to Cash for $882. d. debit On March 20, Dody'...
Results of the first sales transaction event Prepayment: What happens when payment precedes delivery? Deferred payment: What happens when delivery precedes payment? Results of the second sales transaction event How do deferred expenses enter the accounting system? Example journal transactions. ...
What is an invoice entry in accounting? What account is credited for unearned sales commission in accounting? What are nominal accounts in accounting? What are functional expenses in accounting? What are cost ratios in accounting? What is ERP in accounts payable? What are commuting expenses in ac...
If a bond is bought or sold at a time other than those two dates each year, the purchaser will have to tack onto the sales amountany interest accruedsince the previous interest payment. The new owner will receive a full 1/2 year interest payment at the next payment date. Therefore, the...