Accounting for Funds held in Escrow

A business pays cash into an escrow account held by a third party in respect of a property transaction. The amount remains the property of the business until the transaction is complete and shows as a current asset in the balance sheet of the business.

Accounting for Funds held in Escrow January 8th, 2019Team
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Opening Entry In Accounting

An opening journal entry is used to post the opening assets, liabilities, and equity of a business when it first establishes a double entry bookkeeping system.

Opening Entry In Accounting November 8th, 2018Team
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Current Portion of Long Term Debt

The current portion of long term loan or long term debt is a current liability. It is the amount of debt principal repayable within 12 months of the balance sheet date. The current portion of long-term debt is not the same as short term debt.

Current Portion of Long Term Debt August 24th, 2018Team
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Property Purchase Deposit Journal Entry

A business pays a cash deposit to secure the acquisition of a property. At the end of the accounting period the contract is not completely satisfied and the deposit is held on the balance sheet as a current asset. Subsequent to the year end the property purchase is completed and the deposit is used in part settlement for the purchase.

Property Purchase Deposit Journal Entry June 7th, 2018Team
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Purchase Allowance Journal Entry

A business receives a purchase allowance from a supplier in respect of faulty goods. The supplier issues a credit note for 1,500 and the amount is posted to the purchase allowance contra expense account.

Purchase Allowance Journal Entry October 16th, 2018Team
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Petty Cash Replenishment

When a business maintains an imprest system of petty cash it is necessary to replenish the fund at the end of an accounting period. A journal entry is used to record the petty cash expenditure incurred during the period and to reflect the cash used for replenishment.

Petty Cash Replenishment September 28th, 2017Team
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Stock Option Compensation Accounting

Stock options are a form of equity based compensation. When a business purchases the services of key personnel and pays for those services using stock options, it must record the expense in the income statement over the vesting period using stock based compensation accounting journal entries.

Stock Option Compensation Accounting August 30th, 2017Team
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Capitalized Interest Cost

Capitalized borrowing costs are those added to the cost of acquiring an asset to bring it to the condition and location necessary for its intended use.

Capitalized Interest Cost November 13th, 2017Team
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Lump Sum Purchase Calculator

This Excel basket purchase allocation calculator can allocate the total cost of a lump sum purchase over a maximum of 12 assets based on their relative fair market value.

Lump Sum Purchase Calculator August 11th, 2017Team
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Relative Fair Value Method

When a business purchases an asset which includes several assets such as land, land improvements, and buildings which have dissimilar depreciation rates, it needs to be able to allocate the total cost of the asset to its component parts. The relative fair market value method is one technique used to carry out this allocation.

Relative Fair Value Method August 9th, 2017Team
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Rent Deposit Accounting Journal Entry

A rental deposit is paid by a business to a landlord when renting premises. The deposit is refundable but is held by the landlord as security in the event that the business has caused damage to the property or has rent outstanding when the property is vacated.

Rent Deposit Accounting Journal Entry April 13th, 2017Team
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