Accounting Tools

MARCH 26, 2024

What are Credit Sales? Credit sales are purchases made by customers for which payment is delayed. The use of credit sales is a key competitive tool in some industries, where longer payment terms can be used to attract additional customers. A downside of credit sales is the risk of bad debt loss.

Collections 40

Collections Billing Accounting Accounting 40

Accounting Tools

MAY 10, 2024

To some degree, the amount of this expense reflects the credit choices made by the seller when extending credit to customers. This is a debit to the bad debt expense account and a credit to the accounts receivable account. This is not a reduction of sales, but rather an increase in expense.

Collections 40

Collections Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

OCTOBER 20, 2023

Related Courses Fixed Asset Accounting How to Audit Fixed Assets Accounting for the sale of land differs from the accounting for the sale of any other type of fixed asset , because there is no accumulated depreciation expense to remove from the accounting records.

General Ledger 75

General Ledger Accounting Accounting Auditing 75

LedgerDocs

JULY 6, 2023

We have compiled a checklist of information to share with your bookkeeper: Business Documents: Business licenses and permits Employer Identification Number (EIN) Articles of Incorporation or Organization Operating Agreement or Bylaws (if applicable) Any relevant registrations or certifications Financial Statements: Balance Sheet Income Statement Cash (..)

Collections 90

Collections Bookkeeping Petty cash Purchase Order 90

Accounting Tools

MARCH 2, 2024

What are Cash Sales? Cash sales are sales in which the payment obligation of the buyer is settled at once. Cash sales are considered to include bills, coins, checks , credit cards, and money orders as forms of payment. The term can also refer to the sale of a security that requires immediate delivery.

Bookkeeping 40

Bookkeeping Billing 40

Accounting Tools

MAY 10, 2024

Revenues are the fees generated from the sale of goods and services. Examples of Revenue Accounts There are several possible accounts in which revenue transactions may be stored, such as Sales - Goods, Sales - Services, and Fees Earned. What are Revenues?

Accruals 40

Accruals Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

JULY 25, 2023

Related Courses Sales and Use Tax Accounting Overview of Sales Taxes Customers must be charged a sales tax on some sales transactions if the seller has nexus in the territory of the government entity that charges the tax. Having nexus can result in multiple overlapping sales taxes.

Tax 74

Tax Accounting Accounting Accounts Receivable 74

Accounting Tools

OCTOBER 6, 2023

The purpose of the statement is to remind a customer of sales on credit that have not yet been paid to the seller. An invoice provides more detailed information about a specific sale, such as the item description, item price, shipping charges, and sales taxes , while a statement only provides a grand total due for each invoice.

Invoicing 76

Invoicing Billing Collections Bookkeeping 76

Accounting Tools

DECEMBER 22, 2023

Customer Advance Due to Bad Credit The seller is unwilling to advance credit to the customer and so demands payment in advance. This is most common when the amount of the sale is quite large, since extending credit would represent a substantial risk for the seller. Possible reasons for a customer advance are noted below.

Accounting 75

Accounting Accounting Reconciling Bookkeeping 75

Accounting Tools

JUNE 9, 2023

No Proceeds, Fully Depreciated When there are no proceeds from the sale of a fixed asset and the asset is fully depreciated, debit all accumulated depreciation and credit the fixed asset. At that time, the machine is fully depreciated, ABC gives it away, and records the following entry.

Auditing 75

Auditing Accounting Accounting 75

Accounting Tools

JUNE 19, 2023

Using individual cash and receipts in the cash register, summarize on the form the amount of receipts by cash, check, coupon, and credit cards. Using the cash register tape, summarize on the form the amount of gross sales , voided sales, and sales returns to arrive at a net sales figure. Cash sales $518.00 -$3.00

Bank Reconciliation 75

Bank Reconciliation Cash Collection Reconciling Collections 75

Accounting Tools

NOVEMBER 7, 2023

Related Courses Sales and Use Tax Accounting Sales tax is a state and local tax paid by the buyer of goods and services at the point of sale. It is derived by multiplying the price paid by the sales tax rate. There are three different scenarios involving sales taxes, and the accounting treatment varies in each scenario.

Tax 75

Tax Collections Accounting Accounting 75

Accounting Tools

MARCH 25, 2024

A cash receipt is a printed statement of the amount of cash received in a cash sale transaction. The standard cash receipt journal entry for a sale transaction is a debit to the cash account and a credit to the sales account. What is a Cash Receipt?

Accounting 40

Accounting Accounting 40

Accounting Tools

NOVEMBER 8, 2023

If there are proceeds from the sale, they are also recorded in this account. We want to completely eliminate it from the accounting records , so we credit the asset account for $10,000, debit the accumulated depreciation account for $8,000, and debit the disposal account for $2,000 (which is a loss).

Accounting 75

Accounting Accounting Auditing 75

Accounting Tools

JULY 16, 2023

Related Courses Fixed Asset Accounting How to Audit Fixed Assets To calculate a gain or loss on the sale of an asset , compare the cash received to the carrying value of the asset. If the asset had previously been classified as held for sale, it should not have been depreciated since it was classified as such, which is acceptable.

Reconciling 72

Reconciling Auditing Accounting Accounting 72

Accounting Tools

FEBRUARY 13, 2024

What is Days Sales Uncollected? Days' sales uncollected is a liquidity ratio that is used to estimate the number of days before receivables will be collected. It can also be used by management to estimate the effectiveness of its credit and collection activities.

Collections 40

Collections Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

JUNE 12, 2023

Consignment Accounting - Sale of Goods by Consignee When the consignee eventually sells the consigned goods, it pays the consignor a prearranged sale amount. The consignor records this prearranged amount with a debit to cash and a credit to sales. A profit or loss on the sale transaction will arise from these two entries.

Accounting 75

Accounting Accounting Record Keeping Accounts Payable 75

Accounting Tools

OCTOBER 12, 2023

Related Courses Credit and Collection Guidebook Effective Collections What is Credit Risk? Credit risk is the risk of loss due to a borrower not repaying a loan. The credit being extended is usually in the form of either a loan or an account receivable.

Collections 75

Collections Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

FEBRUARY 28, 2024

Why Revenues are Credited The reason why revenues are credited is that they increase the shareholders' equity of a business, and shareholders' equity has a natural credit balance. Thus, an increase in equity can only be caused by transactions that are credited.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Bookkeeping 40

Accounting Tools

APRIL 7, 2024

A liability is recorded in the general ledger , in a liability-type account that has a natural credit balance. Sales taxes payable. Sales taxes charged to customers, which the company must remit to the applicable taxing authority. Liabilities are legal obligations payable to a third party. Salaries payable. Use taxes payable.

General Ledger 75

General Ledger Payroll Deposits Invoicing 75

Accounting Tools

JUNE 11, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook Cost Accounting Fundamentals What is the Cost of Sales? The cost of sales is the accumulated total of all costs used to create a product or service, which has been sold. The cost of sales is calculated as beginning inventory + purchases - ending inventory.

Cost Accounting 75

Cost Accounting Accounts Payable Accounts Payable Bookkeeping 75

Accounting Tools

OCTOBER 24, 2023

Efficiency ratios measure the ability of a business to use its assets and liabilities to generate sales. In the case of assets, efficiency ratios compare an aggregated set of assets to sales or the cost of goods sold. Fixed Asset Turnover Fixed asset turnover is calculated as sales divided by average fixed assets.

Accounts Payable 75

Accounts Payable Accounts Payable Accounts Receivable Accounts Receivable 75

Accounting Tools

JULY 17, 2023

The journal entry is a debit to the bad debt expense account and a credit to the accounts receivable account. It may also be necessary to reverse any related sales tax that was charged on the original invoice, which requires a debit to the sales taxes payable account.

Invoicing 75

Invoicing Accounts Receivable Accounts Receivable Account Receivables 75

oAppsNet

MAY 9, 2024

This article aims to demystify the accounts receivable process, elucidating its significance, operational mechanisms, challenges, and optimization strategies. This financial term encapsulates a credit agreement between a business and its client, where the company allows the client to purchase now and pay later.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Accounting 40

Accounting Tools

MAY 3, 2024

If the amount received from sale of the asset exceeds the amount of the associated debt, then the lender pays the excess amount to the borrower. Here are several examples: Line of credit. Related AccountingTools Courses Accountants' Guidebook GAAP Guidebook Related Article The Difference Between Recourse and Non-Recourse Debt

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Accounting 40

Accounting Tools

JULY 18, 2023

Each example journal entry states the topic, the relevant debit and credit , and additional comments as needed. Example Revenue Journal Entries Sales entry. When goods or services are sold on credit, debit accounts receivable and credit sales. When an account payable is paid, debit accounts payable and credit cash.

Petty cash 75

Petty cash Accounts Payable Accounts Payable Payroll 75

Accounting Tools

JULY 24, 2023

Related Courses Credit and Collection Guidebook Effective Collections Essentials of Collection Law What is the Cash Collection Cycle? The measure is important for tracking the ability of a business to grant a reasonable amount of credit to worthy customers, as well as to collect receivables in a timely manner.

Cash Collection 75

Cash Collection Collections Accounts Receivable Accounts Receivable 75

Accounting Tools

JUNE 8, 2023

Related Courses Bookkeeping Guidebook How to Audit Receivables New Controller Guidebook How to Account for Sales Discounts A sales discount is a reduction in the price of a product or service that is offered by the seller, in exchange for early payment by the buyer. However, what if many discounts are taken?

Accounting 75

Accounting Accounting Accounts Receivable Accounts Receivable 75

Accounting Tools

OCTOBER 21, 2023

The deferred gross profit concept is when a business uses the installment sales approach to recognize its sales transactions. Under the installment method, only the gross profits on those sales for which cash payment has been received are recognized.

Accounts Receivable 74

Accounts Receivable Accounts Receivable Account Receivables Bookkeeping 74

Accounting Tools

OCTOBER 21, 2023

The amount of working capital will increase as a business increases its credit sales , since accounts receivable will expand. The terms under which credit is granted to customers must be curtailed, while payment terms to suppliers must be extended. Receivable and payable terms.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Computation 75

Accounting Tools

APRIL 8, 2024

Controls then span the proper maintenance of accounts receivable, and their elimination through either payments from customers or the generation of credit memos. The key controls to consider are: Require credit approval prior to shipment. Authorize credit memos. Restrict access to the billing software. Segregate duties.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Accounting 40

Accounting Tools

FEBRUARY 16, 2024

Contribution Margin Ratio The contribution margin ratio subtracts all variable expenses in the income statement from sales, and then divides the result by sales. This is used to determine the proportion of sales still available after all variable expenses to pay for fixed costs and generate a profit.

Accruals 75

Accruals Financial Statements Accounts Receivable Accounts Receivable 75

Accounting Tools

MAY 15, 2023

Floor planning is a method of financing inventory purchases, where a lender pays for assets that have been ordered by a distributor or retailer, and is paid back from the proceeds from the sale of these items. The entity at risk in this arrangement is the lender, which is relying upon the sale of the underlying assets in order to be repaid.

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75

Accounting Tools

JUNE 7, 2023

Account Record An account can be the record in a system of accounting in which a business records debits and credits as evidence of accounting transactions. Related Articles Account Analysis Account Reconciliation Cash Basis vs. An account can have several meanings in the accounting profession. They are noted below.

General Ledger 75

General Ledger Accounting Accounting Accruals 75

Accounting Tools

OCTOBER 22, 2023

As another example, a business only incurs credit card fees when it sells products to customers that are paid for with a credit card; if there are no sales , then there are no credit card fees.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Xero

NOVEMBER 30, 2022

Hubdoc credit note detection — Global. Hubdoc will use machine learning to identify when a document may be a credit note and flag it to you for review. You can now access Xero Central support articles without leaving Xero, by selecting the question mark icon in the navigation bar at the top of the screen.

XERO 202

XERO Payroll Bank Reconciliation Tax 202

Accounting Tools

MAY 7, 2024

Accounting for the Lower of Cost or Net Realizable Value To account for an asset write-down under the lower of cost or net realizable value rule, you should debit the amount of the write-down in the Loss on Decline in Net Realizable Value account, and credit the offsetting amount in the the related inventory account.

Collections 40

Collections Accounting Accounting 40