Partnership Appropriation Account

The net income from the profit and loss account is transferred to the partnership appropriation account in order that it can be adjusted for partner salaries, commissions, and interest. Any residual net income after adjustment is distributed to the partners.

Partnership Appropriation Account July 12th, 2018Team
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Departmental Accounting System

Departmental accounting is used by a business to assess the profitability of each of its departments using either the gross profit, contribution, or net profit method.

Departmental Accounting System July 4th, 2018Team
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Manufacturing Account Format

The manufacturing account is a general ledger account used by a manufacturer to accumulate production costs such as direct materials, direct labor and manufacturing overheads. The account is used to calculate the manufacturing cost of goods completed during an accounting period.

Manufacturing Account Format August 16th, 2018Team
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Trading Profit and Loss Account

The trading and profit and loss accounts are temporary accounts in the general ledger. The trading account shows the gross profit and is particularly useful for a trading business which buys and sells finished products as it allows the gross profit and gross profit percentage to be calculated.

Trading Profit and Loss Account July 31st, 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 January 30th, 2018Team
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Revenue Recognition Standard Accounting

A business expects to receive consideration for the sale of goods to its customers. Since accounting periods are for a defined time period a process is needed to allocate the correct amount of consideration to the correct period. This process is referred to as revenue recognition and is applied using a five step revenue model.

Revenue Recognition Standard Accounting January 18th, 2018Team
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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.

Goods Given as Charity Journal Entry November 28th, 2017Team
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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.

Goods Distributed as Free Samples November 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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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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Relationship Between Financial Statements

The four main financial statements are the income statement, statement of retained earnings, balance sheet, and cash flow statement. All four statements are interrelated and allow the user to more fully understand the financial performance of the business through the analysis of its financial statements.

Relationship Between Financial Statements January 24th, 2018Team
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Contra Expense Account

Contra means against. In bookkeeping terms, a contra expense account refers to an account which is offset against an expense account.

As an expense account is normally a debit balance, a contra expense account will normally be a credit balance. When the two balances are offset against each other they show the net balance of both accounts.

Contra Expense Account November 6th, 2016Team
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