Mention what is assets minus liabilities?
Assets minus liabilities is equal to owners’ equity or stockholders equity.
Entries to revenues accounts such as Service Revenues are usually?
Entries to revenues accounts such as Service Revenues usually goes into credit side.
Explain what is the difference between accumulated depreciation and depreciation expense?
The difference between accumulated depreciation and depreciation expense is that Accumulated depreciation: It is the total amount of depreciation that has been taken on a company’s assets up to the date of the balance sheet Depreciation expense: It is the amount of depreciation that is reported on the income statement. Basically, it is the amount that corresponds only to the period of time indicated in the heading of the income statement.
List out some of the examples for liability accounts?
Some of the examples for liability accounts
Short-term Loans Payable
Unearned or Deferred Revenues
Installment Loans Payable
Current Portion of Long-term Debt
Mortgage Loans Payable
Explain how you can adjust entries into account?
To adjust entries into account, you can sort entries into five categories.
Accrued expenses: Expenses have been incurred but the vendors invoices are not generated or processed yet.
Accrued revenues: Revenues have been earned but the sales invoices are not generated or processed yet.
Deferred revenues: Money was received in advance of having been paid or earned
Deferred expenses: Money was paid for a future expense
Depreciation expense: An asset purchased in one period must be allocated to expense in each of the accounting periods of the asset’s useful life
Explain what a deferred asset is and give an example?
A deferred asset refers to a deferred debit or a deferred charge. An example of a deferred charge is bond issue costs. These costs involves all of the fees or charges that an organization incurs in order to register and issue bonds. This fees are paid in a near time when the bonds are issued but it will not be
expensed at that time.
Mention what is Bank Reconciliation?
A bank reconciliation is a process done by a company to ensure that the company’s records (check register, balance sheet, general ledger account, etc.) are correct and that the bank’s records are also correct.
Mention what is “deposit in transit”?
A deposit in transit is a checks and cash that have been received and recorded by an entity, but which have not yet been entered in the records of the bank where the funds are deposited.
Explain what is an over accrual?
An over accrual is a condition where the estimate for an accrual journal entry is too high. This estimate may apply to an accrual of expense or revenue.
Mention what is account receivable?
A short term amounts due from buyers to a seller, who have purchased goods or services from the seller on credit is referred as account receivable.
Explain what are the activities that includes in Cash Flow Statement?
The cash flow statement showcase the cash generated and used during the year or months. Various activities that are involved for the Cash Flow are
Operating activities – business activities accounting to cash
Investing activities – sale and purchase of equipment or property
Financial activities- purchase of stock and own bonds
Supplemental information- exchange of significant items that don’t involve cash
Mention what happens to company’s “Cash Account” if it borrows money from the bank by signing a note payable?
Due to double entry, the “cash account” will increase as such the liability account increases.
Mention which account is responsible for interest payable?
Account which is responsible or affected by the interest payable is “Current liability account”
Mention what is reversing journal entries?
Reversing journal entries are entries made at the beginning of an accounting period to cancel out the adjusting journal entries made at the end of the previous accounting period.
Mention where do generally accruals appear on the balance sheet?
Accrued expenses usually tend to be extremely short-term. So you would record them within the “current liabilities section” of the balance sheet.
List out some of the accrued expenses and the accounts in which you would record them?
Wage accrual is entered with a credit to the “wages payable account” Interest accrual is entered with a credit to the “interest payable account” Payroll tax accrual is entered with a credit to the “payroll taxes payable account”.
Deferred taxation is a part of which equity?
Deferred taxation is a part of owner’s equity.
Mention what does the investment of personal assets by the owner will do?
The investment of personal assets by the owner will increase total assets and increase owner’s equity.