A paid cash on account journal entry is needed when a business has paid cash to a supplier and the amount is not allocated to a particular supplier invoice or the supplier has not yet sent an invoice.
Tag: Balance Sheet
Advertising Expense and Prepaid Advertising
An advertising expense is normally treated as an operating expense in the income statement of a business. Prepaid advertising is treated as an asset and included in the balance sheet.
Certificate of Deposit in Accounting
A business pays cash to purchase a certificate of deposit. The certificate matures after a term of 60 days and has a fixed annual interest rate of 2.5%. The journal entries to show the purchase and maturity are described.
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.
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.
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.
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.
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.
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.
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.
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.
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.