The Accounting Basics Blog lets you know whenever there is a new accounting question, lesson, article of interest, exercise, tutorial or other update to the ventoup.ru website.
By subscribing to this blog you will be notified of these additions and updates within minutes of it going live. To subscribe, simply click on the orange button labelled 'RSS' and follow the instructions (RSS stands for Really Simple Syndication and is a way of distributing online info).
Purchases, Cost of sales,
Balances at 31 January 2009: Debtors control account.............................$32,400 Creditors control account...........................$25,200 Inventory...................................................$30,000
Continue reading "Purchases, Cost of sales,
Balance Sheet, Statement of Owner's Equity and Income Statement
Q1: The three primary financial statements that we have seen so far are the Balance Sheet, Statement of Owner’s Equity, and the Income Statement. Please
Continue reading "Balance Sheet, Statement of Owner's Equity and Income Statement"
Asset Classification & Cashier's Check
Q: I bought a business warehouse. How do I classify this asset if I paid the full amount with a cashier's check? A: This is a pretty simple transaction
Continue reading "Asset Classification & Cashier's Check"
Bank Reconciliation Questions:
What is a Bank Reconciliation and the Bank Reconciliation Process?
An explanation of what a bank reconciliation is as well as the typical process involved.
Continue reading "Bank Reconciliation Questions:
What is a Bank Reconciliation and the Bank Reconciliation Process?"
Work-In-Progress Inventory &
Stage Of Completion Valuation
Q: I want to ask how do you calculate opening work in progress inventory and closing work in progress inventory... and whether this calculation should
Continue reading "Work-In-Progress Inventory &
Stage Of Completion Valuation"
Questions regarding Debtors and Collecting/Settling Accounts
Q: 1. How do I determine the effectiveness of the internal control system with regards to debtors? 2. What are the strategies that I can implement to
Continue reading "Questions regarding Debtors and Collecting/Settling Accounts"
Cost Price, Sales Price, Mark-Up
Q: How do you find the cost price if the sales are $216,000 and the mark-up is 50%? A: Mark-up literally means the amount you mark up the cost by (the
Continue reading "Cost Price, Sales Price, Mark-Up"
Accrued Expenses and Revenue:
Closed or Not?
Q: Does accrued expenses and revenue need to be closed at the end of the accounting period? A: First let's make sure we understand what accrued expenses
Continue reading "Accrued Expenses and Revenue:
Closed or Not?"
Accounting Entry for Giving Away a Free Sample
Q: What entry will be passed in the general journal for goods taken as a free sample? A: The first thing to work out here is whether free samples would
Continue reading "Accounting Entry for Giving Away a Free Sample"
Cash Flow Statement and Depreciation
Q: Depreciation charged during the year will come under which activities? A: Depreciation actually does not come under any of the categories of the cash
Continue reading "Cash Flow Statement and Depreciation"
Financial Statements and Investors
Q: How are the balance sheet, income statement, statement of owner's equity and statement of cash flow useful for investors? 1. Balance Sheet The balance
Continue reading "Financial Statements and Investors"
Trial Balance and Financial Statements Exercise
The trial balance of Palicio Security Services Inc. as of January 1, 2016 had the following normal balances: Cash 74,210 Accounts receivable 13,500
Continue reading "Trial Balance and Financial Statements Exercise"
T Accounts, Journal Entry and Trial Balance Exercise
Q: Juan de la Cruz began professional practice as a system analyst on July 1. He plans to prepare a monthly financial statement. During July, the owner
Continue reading "T Accounts, Journal Entry and Trial Balance Exercise"
Debtors and Creditors Ledger Question
Q: Please prepare the debtors and creditors ledger control account for the following: Balances: Debtors (1/1/10) 150,000 Creditors
Continue reading "Debtors and Creditors Ledger Question"
Credit Balance in
Q: I was solving an exercise of control accounts in which one of the transactions given was this: Credit balance in purchases ledger transferred from
Continue reading "Credit Balance in
Journal Entry for
Recovery of Bad Debts?
Q: What is the double entry of recording recovery of bad debts in control accounts? A: First of all, bad debts are debts owed to the business that have
Continue reading "Journal Entry for
Recovery of Bad Debts?"
Journal Entry Question: Settlement of Debtors Account, Bad Debts
Q: Prepare the journal entry or entries for the following transaction: Issued a receipt for R105 to B. Baloyi in settlement of his account of R126. (R
Continue reading "Journal Entry Question: Settlement of Debtors Account, Bad Debts"
Purpose of Cashflow Statement
Q: Please what is the main purpose of preparing a cash flow statement in an organization? A: Very good question. The purpose of the cash flow statement
Continue reading "Purpose of Cashflow Statement"
Cash Flow Statement Question
Q: Cash flow statement shows negative from operating activities but shows positive on cash at the end of the period. Is that possible? A: Yes, this is
Continue reading "Cash Flow Statement Question"
Which Accounts are Affected by these Transactions?
Q: Which accounts are affected in each of the following transactions? April 3 Purchased office supplies on account, $300. April 4 Received prepayment
Continue reading "Which Accounts are Affected by these Transactions?"
Expenditure: Capital vs Revenue in Nature?
Q: State with reasons whether the following expenditure items are capital or revenue in nature: Purchase of Land. Installation of Plant and Machinery
Continue reading "Expenditure: Capital vs Revenue in Nature?"
Cheap College Books - Some Great Resources I Found
Here are a few great resources I found on cheap college books, including renting and selling back your textbooks.
Continue reading "Cheap College Books - Some Great Resources I Found"
Gift, Sale, Discount & Carriage Paid By Another
Q: What are the journal entries for the following: 1) Received gift of Rs 51,000 from father-in-law by check, which is deposited into business bank account.
Continue reading "Accounting Journals:
Gift, Sale, Discount & Carriage Paid By Another"
Journal Entries Accrual Items Question
Q: I want to know how do you make the following journal entries (rs = Rupees = Indian currency): 1. Outstanding expense - rs 3,000 2. Accrued interest
Continue reading "Journal Entries Accrual Items Question"
Journal Entries and T Accounts Exercise
Create journal entries and draw up the T-accounts for the following transactions (Rs. = Rupees = Indian currency): 1. Harish started business with cash
Continue reading "Journal Entries and T Accounts Exercise"
Journal Entry - Payment on Account
Question: What would be the entries in the journal if the problem is like this: made payments on account, 17,000.00 ? Solution: Here is the entry for
Continue reading "Journal Entry - Payment on Account"
Equity - Distributed and Undistributed Profits
Q: What is the share of undistributed profits? Do we have distributed profits? A: Yes, there is something called undistributed profits and there is
Continue reading "Equity - Distributed and Undistributed Profits"
Fill in the Blank Questions:
Basic Accounting Equation and Changes to Owners Equity
Q: The summaries of balance sheet and income statement data follow. Beginning of year: Total assets $ 85,000 Total liabilities 62,000 Total
Continue reading "Fill in the Blank Questions:
Basic Accounting Equation and Changes to Owners Equity"
Journal Entry for Credit Card Sales Transaction
Q: Prepare the journal entries for the following credit card sales transactions (the company uses the perpetual inventory system): Sold $3,000 of merchandise
Continue reading "Journal Entry for Credit Card Sales Transaction"
Journal for Partial Payment and Trade-In of Vehicle
Q: Paid $12,500 for a car which cost $20,000 with the garage accepting $7,500 in part exchange. The old car cost $22,000 and had depreciated by $5,000.
Continue reading "Journal for Partial Payment and Trade-In of Vehicle
Q: Write the journal entries for the following transactions: Jan 1 Shayam commenced with cash 15,000. Jan 10 Returned goods to Krishna 350. A: Entries
Continue reading "Journal Entries"
Interest charged by the creditor on an overdue account...
would be credit or debit? A: To answer this question you first have to work out what that interest is. Is it an asset, income, expense, liability? The
Continue reading "Interest charged by the creditor on an overdue account..."
T-accounts: Entry for Complex Capital Investment
Q:Owner invested PHp (Philippine Pesos) 500,000 cash along with computer equipment that had a market value of php. 120,000 two years ago but was now worth
Continue reading "T-accounts: Entry for Complex Capital Investment"
Journal Entry - Rent in Advance
Q: LaBouche Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash payment of $600 received
Continue reading "Journal Entry - Rent in Advance"
Define Capital Structure
Q: What is the meaning of capital structure? A: The term capital structure refers to the structure of capital (equity) for a business. Actually more often
Continue reading "Define Capital Structure"
Where to Study Accounting - College Search
Deciding on a college where you'll study accounting can be a bit scary. Use our search tools here to find accounting colleges and classes across the US.
Continue reading "Where to Study Accounting - College Search"
What is a Folio?
Q: What is a folio? A: It's a cross-referencing code, usually a number or a few numbers and letters. It connects two separate records, such as connecting
Continue reading "What is a Folio?"
Is cash flow affected
Q: Is cash flow affected for a company when they have entered into a terms agreement with their customers and no longer receive cash upfront, but sales
Continue reading "Is cash flow affected"
Accounting Question - LIFO Method
Why would tax accountants prefer to use last-in-first-out method?
Continue reading "Accounting Question - LIFO Method"
Income Statement - Six Month Period (Multiple Choice Question)
If the income statement covered a six month period ending on November 30, 2010, the third line of the income statement would read: A. Month ended November
Continue reading "Income Statement - Six Month Period (Multiple Choice Question)"