If you recorded a $1 million expense this month for buying a factory or an office building, it might leave your ledger swimming in red ink. Depreciation lets you expense the purchase price over time to give a more realistic picture of your finances. You can claim depreciation as a tax wri...
The question above does confuse some due to the terminology used in accounting. For example, accounts payable are considered a debt of a company because they involve the purchase of goods on credit. However, in double-entry accounting, an increase in accounts payable is always recorded as a cr...
In accounting, you record receiving cash in advance for a service that is yet to be rendered by debiting cash and crediting unearned revenue. ...Become a member and unlock all Study Answers Start today. Try it now Create an account Ask a question Our experts can answer your tough ...
To record a loan from the officer or owner of the company, you must set up a liability account for the loan and create a journal entry to record the loan, and then record all payments for the loan. The steps in the following sections provide guidance ...
Temporary accounts are used to record accounting activity during a specific period. All revenue and expense accounts must end with a zero balance because they're reported in defined periods. They're not carried over into the future. A hundred dollars in revenue this year doesn't count as $100...
Managing AP well does more than simply record liabilities; it's also an important variable used inmanagerial accountingand fundamental analysis to understand a company's financial position. AP Turnover Ratio Thepayables turnoverratio can reveal how efficient a company is at paying what it owes over...
If the cash advance is repaid through payroll withholdings, the routine payroll entry will record the amount withheld as a credit to Advance to Employees. This in turn results in a smaller amount being credited to Net Payroll Payable. Example of Advance to an Employee Let’s assume that a va...
You’ll want to open a business bank account for your LLC. This makes accounting and record-keeping much easier for your business finances. Having a separate business bank account also maintains your personal liability protection. This is because it keeps your business finances separate from your ...
How to Record a Sales Return for Accounting. Customers often return defective and damaged products to retailers. The difference between gross sales and net sales is the balance in the "sales returns and allowances" account. Companies account for returns
How to record a loss on the sale of equipment? How do you record advertising expense in accounting? How do you record purchase returns and allowances in accounting? How does buying equipment affect the balance sheet in accounting? How do you balance equipment on a balance sheet in accou...