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cash------debit Account payable----Credit
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What accounting method are you using when you record income as the sale occurs?
Accrual method. http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06_1340 Accrual method. http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06_1340
When using accrual accounting revenue is recorded and reported only when?
When it is earned.
What are the accounts affected for rent paid in advanced?
Payer: debit prepaid rent and credit cash. Remember the accrual basis of accounting. After using rent for one month. Then the payer debits rent expense and credits prepaid rent.
How do you record transactions using the accounting equation?
Assets= Liabilities + Equity
Advantages and disadvantages of using manual accounting system accounting?
An advantage to using manual accounting systems is that there is a written record of transactions. A disadvantage to manual accounting is the risk of fire destroying records or a risk of human error.
How do you record the use of baking supplies by using accounting principles?
An Excel spreadsheet would be a good tool to record the use of baking supplies.
Should home owners association be on cash or accrual basis?
Depending on the nature of the association's business profile -- commonly, a non-profit corporation -- there may be guidelines that exist for that profile. Generally, best practices dictate that financial records for associations be kept using an auditable basis, so that regular audits can confirm the transparency of the record keeping. One method is modified accrual basis, meaning that all assessments are credited when due, and expenses are posted when paid. This method allows a more consistent reflection of the status of assessment payments, which as the only (major) source of income for the corporation, may be the most important line item to track.
Is Wage expense an account that is used for wages earned but not yet paid?
When using the accrual method of accounting, expenses are recognized when they're incurred, rather than when they are paid. Consequently, wage expense (or almost any expense, for that matter) is recognized in the period during which it was incurred, in this case, when it was earned by the employee.Depending on the manner in which people are paid, on any given balance sheet date (usually the last day of each month), there may be wages earned, but which won't be paid until the beginning of the next month, i.e. the next pay date. Therefore, at the end of the month, we "accrue" the unpaid wages to recognize the expense incurred. This ensures the expense is reported in the proper period.A similar concept applies to revenues using the accrual basis of accounting.
What are the benefits in using ratios for accounting?
what are the beniftes in using ratios in accounting
Do I have to calculate Cost of Goods Sold if the business uses the Cash acounting system?
Costs of goods sold are a type of expense and although the total may vary between the accrual and cash basis' of accounting, the method of calculating them is the same. Beginning Inventory + Purchases - Ending Inventory = Costs of Goods Sold. If you have no beginning or ending inventory (because you're using the cash basis)... you just add the purchases and applicable expenses. Some of which might be: direct materials and supplies, energy costs, freight, direct labor costs, etc.
How do you record loan using cash basis accounting?
When the money for the loan is received it is recorded as cash. Payments are not recorded until the actual payments are sent out. This will be recorded as a debit to a loan expense account and credited directly to cash. The interest is debited directly to an interest expense account and credited directly to cash for the same payment. A compound entry can be used for this purpose. There is no loan payable or interest payable accounts for cash basis accounting.
What has the author Gary A Porter written?
Gary A. Porter has written: 'Using financial accounting information' -- subject(s): Accounting 'Using financial accounting information' -- subject(s): Accounting 'Financial accounting' -- subject(s): Accounting
