Adding a partner to an existing partnership can result in either goodwill or bonus journal entries depending on which method of accounting is used. The purchase of partnership interest can be undertaken at a valuation equal to, more than, or less than book value.
Accounting distinguishes between capital improvements and repairs and maintenance to an asset. A capital improvement is treated as a capital cost and included on the balance sheet of the business, whereas repairs and maintenance are treated as expenses and included in the income statement for the year.
Capital Improvements After Asset Acquisition June 14th, 2017Team
Deferred tax liabilities are shown as long term liabilities on the balance sheet of a business, and represent obligations to pay income tax at some point in the future arising from temporary timing differences.
Deferred Tax Liability Accounting June 2nd, 2017Team
The accruals and cash basis of accounting are two different methods of preparing financial statements. A business can calculate information relating to cash receipts and payments from it’s accrual based accounting system using accrual to cash conversion formulas.
The cash and accruals basis of accounting are two different methods of preparing financial statements. The conversion from cash basis to accrual basis can be carried out using cash to accrual conversion formulas.
When a business sells goods to a customer on credit terms is might draw up bill of exchange setting out the amount due and the date on which the amount must be paid. The amounts outstanding under these bills of exchange are referred to as bills receivable.
Bills Receivable in Accounting April 3rd, 2017Team
Bills of exchange can be used when credit terms are offered by a business to a customer. The bill is a transferable document which when accepted, indicates agreement by the buyer that the amount of the bill is payable on a particular date.
Bills of Exchange in Accounting April 3rd, 2017Team
Capital receipts are those which are normally non-recurring and either increase a liability account or decrease an asset account. Revenue receipts are usually recurring and are part of the normal trading operations of the business, such as the sale of goods and services.
Capital Receipts vs Revenue Receipts February 8th, 2017Team