A business had previously written off a bad debt of 2,000 using the allowance method for bad debts, but has now managed to make a bad debt recovery and has received 900 in part payment of the account.
Last modified August 9th, 2019
Tag: Balance Sheet
Non-Cash Capital Introduction
Imprest Petty Cash
The imprest system of petty cash is a method of accounting for petty cash expenses. Under the system, the petty cash fund balance is always restored at the end of the accounting period back to its original amount. At any one time the cash held plus the petty cash vouchers should always be equal to the original fixed imprest amount.
Last modified November 29th, 2022
Allowance Method For Bad Debt
Adjusting Journal Entries – Common Examples
Reversing Entries
Specific Identification Inventory Method
The specific identification inventory costing method is a way of determining the cost of goods sold and the value of the ending inventory. Under the specific identification inventory method, it is assumed that each unit of inventory can be identified and traced from purchase to sale.
Last modified July 16th, 2019
Cash Received for Services Provided
Allowance for Doubtful Accounts
A customer has been invoiced a total of 5,000 for goods and the business has decided that there is doubt as to whether the customer can pay in full. They have decided to adjust the allowance for doubtful accounts provision by 500 in respect of the accounts receivable balance of 5,000.
Last modified January 26th, 2023
Accounts Receivable
Accounts receivable are amounts which are owed to a business by its customers, they are sometimes referred to as trade debtors. Accounts receivable are recorded in the balance sheet of the business under the heading current assets, that means they are convertible into cash within a year.
Last modified September 26th, 2022
Accounts Payable Payment
When goods are purchased on credit from a supplier the amount owing to the supplier is recorded as an accounts payable. When a payment is made to the supplier for the amount outstanding the payment of the liability is recorded using an accounts payable payment journal entry.
As an example suppose a payment of 3,000 is made to a supplier using cash.
Last modified January 24th, 2023
Prepaid Rent Accounting Entry
Prepaid rent is an expense which has been paid in advance.
A business has an annual office rent of 12,000 and pays the landlord 3 months in advance on the first day of each quarter. On the 1 April it pays the next quarters rent in advance of 3,000 to cover the months of April, May and June It has a prepaid expense of 3,000.
Last modified December 6th, 2019