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...
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...
such as buildings, equipment and vehicles. AccountingTools explains that the carrying amount equals the purchase cost, less accumulated depreciation and losses due to impairment. You calculate the building's carrying amount based on depreciation, regardless of the current...
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...
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 can I record mortgage payable in the balance sheet? Explain how to record accounting seller financing purchase of business. How to record an asset purchased on a note and traded in shortly after? How do you record in accounting a payment for inventory that has not b...
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 ...
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...
In addition to federal regulations, you must abide by state payroll processing laws. Each state has its own rules, some stricter than others, governing minimum wage, payday schedules and recordkeeping. So, if you’re conducting business across state lines, your payroll compliance becomes that much...
Related to this QuestionHow do you record a sale of an asset in accounting? How do you record sale of business land in accounting? How do you record the sale of a depreciable asset in accounting? How do you record a purchase discount in accounting? How do you show equipment sold o...