Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Effects of transaction
An asset supplies on hand increases (debited) as well as a liability accounts payable increases (credited) by USD 1400. The debit is to Supplies on Hand relatively than Supplies Expense because the supplies are to be used over several accounting periods.
In each of the three previous entries we debited an asset rather than an expense. The cause is that the expenditure relate to (or benefits) more than just the current accounting period. At any time a company will not fully utilize up an item such as insurance, rent or supplies in the period when purchased it typically debits an asset. In fact, but sometimes the expense is initially debited in these situations.
Companies occasionally buy items that they fully use up within the current accounting period. For instance during the first part of the month a company may buy supplies that it intends to consume fully during that month. If the company completely consumes the supplies during the period of purchase the best practice is to debit Supplies Expense at the time of purchase rather than Supplies on Hand. This similar advice applies to insurance and rent. If a company buys insurance that it fully consumes during the current period the company must debit Insurance Expense at the time of purchase rather than Prepaid Insurance. As well if a company pays rent that applies only to the current period Rent Expense must be debited at the time of purchase rather than Prepaid Rent. As exemplify in section 3 following this advice simplifies the procedures at the end of the accounting period.
Honesty AL, CPA, is compiling financial statement of significant accounting policies, Honesty AL discovers that the method used to value inventory in the past was stated as "invent
Q. What do you mean by Risk management contracts? In the normal course of business the Company utilizes a variety of off-balance-sheet financial instruments to manage its expos
Can you give me a more simple definition of Mutual Confidence and give me an example of a situation of it
Consider the following 2008 data for Newark General Hospitals (in millions of dollars Simple Budget_______Flexible Budget_ Actual Budget__ Revenue______$4.7$____4.8_____$4.5____.
Q. What are Service companies? Service companies carry out services for a fee. This group comprise law firms, accounting firms and dry cleaning establishments. The early sectio
How to define Inter company Transaction in Account Receivable? Ans) Intercompany transactions are those transactions that takes place among two or more entities of the similar g
Kim presently owns a business that processes and distributes fresh vegetable to local supermarkets. She is looking to expand her business by acquiring the Lackawaxen Emu Oil Compan
office supplies on hand at year-end amounted to 3000.
Liquidity Ratios (Short Term Solvency Ratios): These Ratios calculate the capability of the firm to meet its current obligations. They point out whether the firm has enough li
The widget industry is perfectly competitive. The industry demand and supply functions for widgets are given below. Q d = 424 - 40P Q s = 40 + 8P a. What is the equi
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd