journal entry would be: Accounts Receivable 4‚400 Sales 4‚400 Subsequently‚ if the customer pays within 10 days‚ he would be entitled to avail the cash discount. The journal entry to record payment would be: Cash 4‚312 Sales Discounts 88 Accounts Receivable 4‚400 However‚ if the customer does not pay within 10 days‚ they would not be entitled to avail the cash discount and the journal entry to record the payment would be simple: Cash 4‚400 Accounts Receivable 4‚400 Net Method
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following: Assets Liabilities Owner’s Equity (a) $18‚000 $ 11‚000 $50‚000 (b) $ 28‚000 $35‚000 $ 7‚000 (c) Categories/classes of accounts 2. . Indicate whether each of the following represents an asset‚ liability‚ or owner’s equity/Capital: (a) accounts payable/Creditors (b) wages expense (c) capital (d) accounts receivable/Debtors (e) withdrawal (f) Land g. prepaid insurance unearned revenue g. prepaid insurance 3. Identify each of the following as an (1)
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recognized. Depreciation is an expense‚ so it is needed to be charged into the profit and loss account annually. The net profit of the business is also reduced due to the depreciation
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already has an outstanding loan of $150‚000 which is secured by the production equipment that was purchased with the money from the loan. Smackey Dog Food Inc.’s goal is to secure a second loan that would be secured by the company’s corporate accounts receivable. The bank is requiring a set of audited financial statements before issuing the second loan. Therefore‚ Smackey Dog Food Inc has contacted my firm‚ Keller CPAs‚ to perform the audit. My firm had no prior experience with auditing dog food
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CHAPTER 5 REVENUES AND MONETARY ASSETS Chapter 5 is about Revenue Recognition and Monetary Assets. There are different criteria used in recognizing revenue depending on the standards the company is using. In general‚ revenues should be recognized when an entity has significantly performed what is required in the agreement‚ full ownership of goods is transferred‚ and services are rendered. The Securities and Exchange Commission (SEC) have identified fraudulent cases where the companies
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fair view accordance with approved accounting standards. To access the accounting system and internal controls starting point is Revenue Cycle. Sales cycle is the process businesses use to describe the financial progression of company’s accounts receivables from the beginning which the company acquire product to the end of cycle when the company received cash payments from customers in cash or within credit terms if there is credit sales of products. The sales accounting system of such an entity
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Equity Method If owned shares are 25% or more then Significant influence so Equity Method is used eg. Take 25% of income Investment Income = Less % of Dividends Paid + % of Net Income + Impairment Calculation + Amortization of Excess Payment of FV of Assets Note: Do not record Share Price Increase or Decrease 2013-24‚ 2013M1-31‚ 2008-82 Co. Q’s share of the excess of fair value over book value of the asset should be amortized over the life of the asset and charged
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net working capital requirements. Yet‚ despite its importance‚ few small business managers can dedicate significant time managing cash. Most develop a set of techniques to avoid cash crises‚ but many of these “systems” are as basic as matching receivables to payables. Most cash management systems in small companies employ a fraction of the tools available to them‚ as small business managers rarely have a forum to transfer knowledge about management practices. While each company has certain strategies
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Transactions- quantifiable business events w/c can be expressed in terms of money. Exchange of values. ( What? *Books of Accounts (journals / ledgers) ( Where? *Chronologically & Systematically (accordance to procedures & established rules of acctg) ( How? 2. Classifying- similar & inter-related transactions of events *Account / Account Title- device used to classify *3 Broad Categories – Assets / Liabilities / Capital 3. Summarizing- preparation of financial statements
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trending using common size analysis. Discussion of relevant issues revealed that the decrease in ROE is caused by the decreased efficiency in the utilization of current assets – especially accounts receivable. The group therefore recommends the further investigation of the increase in accounts receivable and inventory. I. Point of View This group is on the point of view of a Vice President – Finance II. Case Context The First Farms Corporation (FFC) started as a small animal feeds
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