economic benefits controlled by the enterprise. According to FASB Statement of Concepts No 6‚ paragraph 80‚ expenses are outflows or other using up of assets or incurrences of liabilities (or a combination of both) during a period from delivering or producing goods‚ rendering services‚ or carrying out other activities that constitute the entity’s ongoing major‚ or central‚ operations. Expenses are gross outflows incurred in generating revenues. (ii.) SCON No. 6‚ paragraph 148‚ states that costs should
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In Capital.| |C.S. Common Stock |APIC Additional PIC | |CSE Common SE |PMR Profit Margin | |EOF End of |Ratio | |Financing (Period) |PV Present Value | |FV Future Value |R.E. Retained | |IE Interest Expense|Earnings | |I.S. Income |S.H. ShareHolder | |Statement |S.E. ShareHolder | |FS Financial |Equity | |Statements |SYD Sum of the | |LCM Lower Cost & |Years’ Digits | |Market
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Reporting b. Financial Statements – Know how to calculate each and all the parts in them b.i. Income Statement – Single and Multi-Step Net Sales - COGS Gross Profit Operating Expenses: - General and Administrative Expenses - Selling Expenses Income from Operations Plus other Revenues Less other Expenses Income Before Taxes Less Taxes Net Income b.ii. Statement of Retained Earnings Beginning Retained Earnings Plus: Net Income Less: Dividends Paid Ending Retained Earnings
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assume that the operating expenses do not include any financing expenses (such as interest expense on debt). While this assumption‚ for the most part‚ is true‚ there is a significant exception. When a firm leases an asset‚ the accounting treatment of the expense depends upon whether it is categorized as an operating or a capital lease. Operating lease expenses are treated as part of the operating expenses‚ but we will argue that they really represent financing expenses. Consequently‚ the operating
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matching concept d) adjust and record prepaid expenses‚ expenses due‚ income accrued and income received in advance on balance day e) adjust and record bad debts‚ bad debts recovered‚ doubtful debts and provision for doubtful debts f) record the general journal entries to incorporate balance day adjustments Balance Day Adjustments Definition of Balance Day Adjustment are entries made at the balance day in order to match the revenues and expenses accurately so that profit can be determined
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2-1 BU8101 Accounting: A User Perspective Lecture 2 The Accounting Cycle Wednesday‚ 17 August 2011 Mrs. Ho Yin Kheng S3-01C-88 Nanyang Business School Nanyang Technological University Email: yklau@ntu.edu.sg Tel: 67905694 2-2 LO 2 Lecture Outline 1. Analyzing Business Transactions 2. Recording Process a. b. c. d. e. f. The Source Document The journal The accounts Debit and Credit rule Recording process illustrated Unadjusted trial balance 3. Adjusting entries
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and allowances Net sales Cost of goods sold Gross profit $210‚000 6‚000 204‚000 77‚000 127‚000 Operating expenses Salaries Rent Promotional and advertising Depreciation Operating income 106‚000 21‚000 $38‚000 34‚000 20‚000 14‚000 Other income (expense) Interest income 2‚000 Interest expense (3‚000) Income before income tax Income tax expense Net income (1‚000) 20‚000 7‚000 $13‚000 -2- Suggested solution -- ACCO 230 Midterm exam‚ May 2013 Question
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so the company can track their asset and asset depreciation. The textbook explains the cost principle‚ “…requires that companies record plant assets at cost." When the employee handling the accounting records the entry they debit is applied to the asset and a credit to the corresponding account allocated. Recording of the disposal of plant assets the company records the original plant assets at the original costs‚ less the calculated depreciation once the value is determined as a gain or a loss
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Payable | | 12‚350 | Common Stock | | 20‚000 | Dividends | 600 | | Service Revenue | | 13‚620 | Salaries Expense | 2‚200 | | Travel Expense | 1‚300 | | Rent Expense | 1‚200 | | Miscellaneous Expense | 200 | | | ------------------------------------------------- 55‚970 | 55‚970 | Other data: 1. Supplies on hand total =380. 2. Depreciation is $1‚000 per =uarter. 3. Interest accrued on 6-month =ote payable‚ issued January 1‚ $300. 4. Insurance expires at the
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bonus. Hence she feels that there was no need to disclose with regards to the 13th bonus amount paid to employees. One of the basic accounting foundation principles is the full disclosure principle. According to this principle‚ all revenues and expenses incurred should be shown in the same financial period. The main objective of this principle is to avoid any overstatements of income at any time. Therefore‚ Grace should disclose all information within the statement or in the notes to the statement
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