If there’s a shortage or overage, a journal line entry is recorded to an over/short account. If the petty cash fund is over, a credit is entered to represent a gain. If the petty cash fund is short, a debit is entered to represent a loss. Ready to Experience the Future of Finance? The petty…
The net amount of accounts receivable outstanding does not change when this entry is completed. The method does not involve a reduction in the amount of recorded sales, only the increase of the bad debt expense. For example, a business records a sale on credit of $10,000, and records it with a debit to the…
The most important thing to remember when working with the allowance methods for bad debt is to know what you have calculated! Once you figure a dollar amount, ask yourself if that amount is the bad debt expense or the allowance. If it is the allowance, you must then figure out how much bad debt…
With accrual accounting, a company records income when completing a service or delivering goods rather than when payment is received. Transactions can be more complex in the accounting world because businesses may make a deal today that won’t be settled until a future date. Or, they may have revenues or expenses that are known but not yet…
For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. All such information is provided solely for convenience…
If the journal accounting entry amount doesn’t match your bank account statement and you close it out, then the software will adjust the opening balance equity account balance. Mastering the process of recording credit card payments in QuickBooks is not just a fundamental task but a vital step toward ensuring accurate financial management. You can…
Key financial charts, summaries, metrics, and funding forecasts built-in. Food Truck Excel Financial Model Template helps to estimate required startup costs. The financial model streamlines food truck startup costs and revenue projections, ensuring a compelling presentation for potential investors. This guide has provided you with a general overview of how to build an effective financial…
There can be different depreciation or cost allocation methods, including the straight-line and reducing balance methods. In addition, a business may set its policy threshold for capitalization. For instance, if the business gets $3,000 as a threshold and purchases the asset amounting to $2,000, there is no need to capitalize the asset. Suppose a company…
For companies, the tax implications of paying dividends can also be significant. While dividends are not tax-deductible expenses, meaning they do not reduce the company’s taxable income, they can influence the company’s overall tax strategy. For example, companies may choose to retain https://psyhology-perm.ru/Rez.htm earnings and reinvest them in the business to defer taxes, rather than…
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