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.

Last modified July 16th, 2019 by Michael Brown
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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.

Last modified July 16th, 2019 by Michael Brown
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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.

Last modified July 16th, 2019 by Michael Brown
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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.

Last modified July 16th, 2019 by Michael Brown
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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.

Last modified July 16th, 2019 by Michael Brown
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Goods Given as Charity Journal Entry

A business records an bookkeeping entry for goods given to charity. Since the goods are given free of charge they have no sales value and cannot be recorded as sales and therefore the cost of goods needs to be removed from the purchases account and transferred to a charitable expenses account.

Last modified July 16th, 2019 by Michael Brown
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Goods Distributed as Free Samples

A business records an accounting entry for free samples given to customers. Since the free promotional samples have no sales value they cannot be recorded as sales and therefore the cost of the samples needs to be removed from the purchases account and transferred to a promotional expenses account.

Last modified July 16th, 2019 by Michael Brown
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Cash Deposit Bank Journal Entry

A business maintains a checking account with a financial institution to allow it to make day to day deposits and withdrawals of cash. A cash deposit in bank journal entry is used to record the transfer of the physical cash held by the business to the bank account.

Last modified July 16th, 2019 by Michael Brown
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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.

Last modified July 16th, 2019 by Michael Brown
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Reimbursed Employee Expenses Journal

Accounting for reimbursed expenses requires two journal entries, the first is to record the expense and the liability to the employee, the second is to record the payment to the employee to clear the liability.

Last modified July 16th, 2019 by Michael Brown
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Cash Over Journal Entry

A cash register reconciliation carried out by a retail business shows a cash overage arising from the difference between the cash receipts counted on the register and the sales recorded on the cash register tape.

Last modified August 8th, 2019 by Michael Brown
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Cash Shortage Journal Entry

A cash register reconciliation carried out by a retail business shows a cash shortage arising from the difference between the cash receipts counted on the register and the sales recorded on the cash register tape.

Last modified August 8th, 2019 by Michael Brown
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