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trade in allowance is considered as acurent asset.
it can be explianed and understood with help of following example .
a firm has exchange a used ( 2nd hand ) machine for a new one. the worth of new machine has 20000. while the book value of old machine was 10000 but it was traded for worth of 12000, so it saved two 2000 cash , which is an asset.
New machine 20000(Dr)
Old machine 10000(Cr)
Trade in allowance 2000(Cr)
cash 8000(Cr)
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Is a trade debtors asset or liability?
yes It is an Asset, not a Liability.
What is a trade in allowance?
Trade in allowance is the allowance provided by the vendors to the company when company sell the old asset and acquire the new same asset from vendor, trade-in allowance is the amount paid by vendor for the old asset if it is more than salvage value then it is gain otherwise loss on sale of asset.A trade-in allowance is the amount of money taken off the sale price in exchange for the item being traded in by the customer. It is most commonly seen in the automotive industry when a person trades in their old car to the dealer. The term "trade-in allowance" is used because it is different than the actual value of the item. For example, the new car has a retail price of $20,000, but the dealer would be willing to discount the vehicle and sell it for $19,000 cash. The old car has a wholesale value to the dealer of $8,000; but the dealer would offer a trade-in allowance of $9,000 off the full retail price of the new car. The difference between full retail and the trade-in allowance ($11,000) is the same as the difference between what the dealer is willing to take for the new car and what he is willing to pay for the trade-in (19 - 8 = 11). The actual values are used in the accounting entry. Here, the dealer records a $19,000 sale and a used car at a cost of $8,000.
Is trade accounts payable a current liability?
Yes its a current liablity
What is an example of an current liability account?
Trade Creditors Accrued expenses Prov. for annual leave Prov. for taxation Income in advance
How do you account for goods received and invoice received?
Goods Received: Debit Stock Credit Goods Received Invoice Received: Debit Goods Received Credit Trade Payables Result: Debit Stock (Asset) Credit Trade Payables (Liability)
Is a trade debtors asset or liability?
yes It is an Asset, not a Liability.
What is a trade in allowance?
Trade in allowance is the allowance provided by the vendors to the company when company sell the old asset and acquire the new same asset from vendor, trade-in allowance is the amount paid by vendor for the old asset if it is more than salvage value then it is gain otherwise loss on sale of asset.A trade-in allowance is the amount of money taken off the sale price in exchange for the item being traded in by the customer. It is most commonly seen in the automotive industry when a person trades in their old car to the dealer. The term "trade-in allowance" is used because it is different than the actual value of the item. For example, the new car has a retail price of $20,000, but the dealer would be willing to discount the vehicle and sell it for $19,000 cash. The old car has a wholesale value to the dealer of $8,000; but the dealer would offer a trade-in allowance of $9,000 off the full retail price of the new car. The difference between full retail and the trade-in allowance ($11,000) is the same as the difference between what the dealer is willing to take for the new car and what he is willing to pay for the trade-in (19 - 8 = 11). The actual values are used in the accounting entry. Here, the dealer records a $19,000 sale and a used car at a cost of $8,000.
Is trade accounts payable a current liability?
Yes its a current liablity
How do you distinguish between an exposed net asset position and an exposed net liability position?
The difference between an exposed net asset position and an exposed net liability position, is that an exposed net asset position occurs when a company's trade receivables and other assets denominated in a foreign currency are greater than its liabilities denominated in that currency. An exposed net liability position occurs if a company's liabilities denominated in a foreign currency exceed receivables denominated in that currency.
What is an example of an current liability account?
Trade Creditors Accrued expenses Prov. for annual leave Prov. for taxation Income in advance
How do you account for goods received and invoice received?
Goods Received: Debit Stock Credit Goods Received Invoice Received: Debit Goods Received Credit Trade Payables Result: Debit Stock (Asset) Credit Trade Payables (Liability)
What is the trade readjustment act?
Trade Readjustment Allowance or TRA is a special program by the federal government to keep the workers who were affected by the increase in imports. They can be qualified for reemployment services, training, job search allowance, and relocation allowance.
What is a word that starts with an 'A' and has to do with trade?
asset arbitrage
Is land used in a trade or business a Section 1231 asset?
yes....it is an asset and can be used in a trade/business if improved ie parking lot, or farming.
What is trade receivable?
The term trade receivable refers to the amounts due to a business following the sale of goods or services to another company. It is a subcategory of Accounts Receivable. Trade receivables are considered a current asset on a company's balance sheet, as they can be readily converted into cash.
What are the causes of liquidity risk?
issues in which a party interested trading on asset cannot do it because nobody in the market wants to trade that asset.
If equipment priced at 130000 is acquired by trading in a similar asset at 8000 What is the cost basis of the new asset?
As trade-in value of old asset is 8000 which is deducted from price of new asset and actual cash paid to acquire new asset is 122000 so the base value for new asset will be 122000.
