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What happens if you fail to record payment of an expense in accounting?
Wiki User
∙ 16y ago
It would appear as if the payment is still due.
Wiki User
∙ 16y ago
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What is the accounting journal entry to record payment to bondholders?
debit bond holderscredit cash
How do you record bad debit?
The accrual accounting method is - Debit the Bad Debt expense account Credit Accounts Receivable With cash basis accounting no record is made of the bad debt since the sale is not recorded until payment is received. Any materials and labor costs are recorded when paid. There is no deduction for loss of income since the income was not recorded.
What are the accounting journal entries to record an overcharged cost that was posted to an expense purchase to Accounts Payable and was paid at a later date?
general journal
What would be the effect of outstanding expense on accounting equation?
As we know, in accounting and book-keeping, expenses are debited in order to cause a decrease in the owner's (or stockholders') equity. So in this case, we record outstanding expense as: ASSETS = LIABILITES + CAPITAL Nil = +(outst. expense) - (outstanding expense) Outstanding Expenses are added to Liabilities because it is business' CURRENT LIABILITY and deducted from CAPITAL because it causes a decrease in owner's equity. NOTE: At the time of payment we deduct it from Liabilities as well as from Cash ( or in JOURNAL ENTRY: we debit Outstanding Expense and credit Cash) ASSETS = LIABILITES + CAPITAL -outst. exp. = -outst. exp. + Nil
What are the accounting journal entries to record a purchase of advertisement on credit with payment on the next month?
I am not sure but, if you are taking ACT 101 IN Harper College, the answer is going to be expense for $ 85. It means that you have to put $85 to note payable section, and then you also have to put $85 to expense account to subtract the amount. In other words, for the account of May 27, $85 is going to be on the Note payable account of Liabilities part, and you should put down the ($85) at the expense that is on the same line.
If you received a utility bill but you haven't paid for it Do you have to record it?
If you use accrual accounting you would record the utility bill as a Payable. If you are on a cash basis and do not record any payables or receivables, then you would only record the expense when you actually pay the bill.
What is the accounting journal entry to record payment to bondholders?
debit bond holderscredit cash
How do you record bad debit?
The accrual accounting method is - Debit the Bad Debt expense account Credit Accounts Receivable With cash basis accounting no record is made of the bad debt since the sale is not recorded until payment is received. Any materials and labor costs are recorded when paid. There is no deduction for loss of income since the income was not recorded.
Why do you need to keep accounting books?
Accounting books are good so you know how much money you have in your account. It is also good to have a record of all business expense in case you get audited.
What are the accounting journal entries to record an overcharged cost that was posted to an expense purchase to Accounts Payable and was paid at a later date?
general journal
What would be the effect of outstanding expense on accounting equation?
As we know, in accounting and book-keeping, expenses are debited in order to cause a decrease in the owner's (or stockholders') equity. So in this case, we record outstanding expense as: ASSETS = LIABILITES + CAPITAL Nil = +(outst. expense) - (outstanding expense) Outstanding Expenses are added to Liabilities because it is business' CURRENT LIABILITY and deducted from CAPITAL because it causes a decrease in owner's equity. NOTE: At the time of payment we deduct it from Liabilities as well as from Cash ( or in JOURNAL ENTRY: we debit Outstanding Expense and credit Cash) ASSETS = LIABILITES + CAPITAL -outst. exp. = -outst. exp. + Nil
What is the entry to record depreciation expense?
There are two entries to record Depreciation Expense. Say we are depreciating a TruckDebit Depreciation Expense - Equipment TruckCredit Accumulated Depreciation - Equipment TruckAt the end of the Accounting Cycle when the books are closed Depreciation Expense will be closed out, Accumulated Depreciation will not be. It remains on the books as long as the item being depreciated is in use and still listed as an Asset.
What are the accounting journal entries to record a purchase of advertisement on credit with payment on the next month?
I am not sure but, if you are taking ACT 101 IN Harper College, the answer is going to be expense for $ 85. It means that you have to put $85 to note payable section, and then you also have to put $85 to expense account to subtract the amount. In other words, for the account of May 27, $85 is going to be on the Note payable account of Liabilities part, and you should put down the ($85) at the expense that is on the same line.
What is sales accrual?
Accrual is a form of record-keeping. Usually, businesses record sales on a cash or accrual basis. Accrual accounting is when sales are recorded when they are made instead of when payment is received.
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.
J. true or false In cash as contrasted with accrual accounting a company does not record amounts due from customers in its accounting records.?
True. Under the Cash Basis for Accounting only transactions that involve the movement of cash are recorded. In Accrual Accounting (GAAP) you would record transactions once an economic event has taken place (e.g., supplier invoice received = expense, customer invoice prepared = revenue).
Why is it important to determine whether the prepayment should be recognized as current asset or as an expense when preparing adjusting entries?
The importance of recognizing a prepayment as a current asset when preparing adjusting entries is to appropriately match the expense to the period in which the expense is incurred. This matching of revenue and expense to the proper period is a basic principle of accrual based accounting. For example, the most common of prepayments is insurance. Most insurance policies require a down payment of 30% and equal payments for nine months thereafter. If the payment is posted directly to expense there will be 30% in the first month and approximately 7.78% in the next nine months and 0% in the last two. However, the insurance expense should be recorded as 1/12 or 8.3% per month. By posting the payments to a current asset account as a prepayment and posting a recurring entry each month that debits insurance expense and credits the current asset, you will record the expense evenly over the year as the policy expires. The importance of this method of recording a prepaid expense is more important if there is unexpended expense at the end of the operating cycle. If the prepayment is appropriately expended during the operating cycle, the monthly accounting will be distorted but the annual numbers will be correct. If the prepayment extends into the next operating cycle, the operating cycle with the payment will have an overstated expense and the subsequent operating cycle will have a understated expense.
