Admission of a New Partner

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.

Admission of a New Partner June 16th, 2017Team
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Capital Improvements After Asset Acquisition

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
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Deferred Tax Liability Accounting

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
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Accrual to Cash Conversion

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.

Accrual to Cash Conversion May 16th, 2017Team
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Cash to Accrual Conversion

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.

Cash to Accrual Conversion May 9th, 2017Team
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Accruals and Deferrals

Accrual and deferral journal entries are posted to ensure that revenue and expenditure are included in financial statements on an accruals not a cash basis.

Accruals and Deferrals May 9th, 2017Team
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Royalties in Accounting

Royalty accounts are used to record royalties paid by a licensee to a licensor for the use of a long term asset owned by the licensor.

Royalties in Accounting April 19th, 2017Team
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Bills Receivable in Accounting

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
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Bills Payable in Balance Sheet

Bills payable are liabilities due under bills of exchange accepted by a business. The term is sometimes more generally used to refer to accounts payable.

Bills Payable in Balance Sheet April 3rd, 2017Team
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Bills of Exchange in Accounting

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
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Balancing off Accounts

Part of the accounting cycle is to produce a trial balance, in order to do this it is necessary to balance off the ledger accounts at the end of each accounting period.

Balancing off Accounts February 23rd, 2017Team
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Capital Receipts vs Revenue Receipts

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
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