According to Inc., an expense account is an account that details the money advanced to a salesperson, officer of the company or other employee for food, lodging, client entertainment, travel and other expenditures necessary for the employee to make a sale or perform his job. An example would ...
What is actual costing in accounting? What is the true balance for an expense account in accounting? What are incurred costs in accounting? What are capital expenditures in accounting? What are accrued expenses payable in accounting? What are miscellaneous expenses in accounting?
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Under the accrual method of accounting, an expense is a cost that is reported on the income statement for the period in which: The cost best matches the related revenues The cost is used up or expires There is uncertainty or difficulty in measuring the future benefit of the cost Examples of...
In an inflationary economy, the older purchases (lower costs) are assumed to be sold first under the FIFO method, giving rise to a higher profit for the current accounting period than that will be under the average method. The ending inventory under FIFO is comprised of more expensive goods,...
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If impairment is confirmed as a result of testing, an impairment loss should be recorded. An impairment loss records an expense in the current period that appears on the income statement and simultaneously reduces the value of the impaired asset on the balance sheet.2 ...
AnExpenseorExpenditureis a cost during a specific accounting period that occurs as a business’ or organization’s operating activities. It is the amount of money that any entity has to spend on something. In everyday English, the term refers to an outflow of money from a party to pay for...
a capital lease is treated as a purchase of an asset undergenerally accepted accounting principles (GAAP), while an operating lease is handled as a true rental agreement. Capital leases impact a company's financial statements, affecting interest expense, depreciation expense, assets, and liabilities...
Definition of Permanent Account In accounting, a permanent account refers to a general ledger account that is not closed at the end of an accounting year. The balance in a permanent account is carried forward to the subsequent year, where it becomes the beginning balance for the new year. ...