Accounting And Financial Services

Accounting And Financial Services

Accounting And Financial Services

How would one provide an example demonstrating how the bookkeeping and accounting services sector might relate and interact with other sectors in the financial services industry?

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Aug 25, 2018
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Financial Services And Accounting
by: Stephanie

Thank you for your question about seeing an example of how the bookkeeping and accounting services industry might relate with another sector in the financial services industry.

One example would be the relationship between an accountant and a bank loan officer. Such as when a bookkeeper and accountant take care of the entering and categorizing and reporting of business income and expense transactions which generates a profit & loss statement and balance sheet.

Then both of these financial statements would be able to be presented to a loan officer who would use the bookkeeping forms as a way to determine whether or not a business is eligible for a business loan.

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Accounting Credit On Sales Tax Report

Accounting Credit

Accounting Credit

Can you deduct an accounting credit on the sales tax report for timely tax payment? If you need to debit the sales tax, where should you credit it? Thank you.

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Jul 26, 2023
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Eligible Accounting Credit
by: BB

Yes, you may be eligible for an accounting credit on the sales tax report if you pay the sales tax on time.

To debit the sales tax amount from your records, you would credit it to the appropriate liability account, such as "Sales Tax Payable" or "Sales Tax Liability."

This ensures that the sales tax is properly accounted for as a liability until it is remitted to the tax authorities.

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Accounting Date for Checks

by Pam
(San Diego, CA)

Accounting Date For Checks

Accounting Date For Checks

We use cash accounting. When we enter checks into our accounting system that we issue to pay our company's bills. What date should be recorded on the general ledger? The date on the check or the date on the bank statement showing when the check cleared the bank account. For example, this can be tricky around year-end when you date a check 12/29 and it appears on the bank statement as 1/5.


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Aug 25, 2018
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Bank Statement Vs Check Date
by: Stephanie

Thank you for your question about what date to use when entering checks into your accounting system, check date or bank statement date. The answer depends upon whether or not you are a cash basis company or an accrual basis company.

If your business is accrual basis, you will need to enter the date of the check. If your business is cash basis, you will need to enter the date the check cleared the bank which would be the date on the bank statement.

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Accounting Designated Trip Allowance

by Lawrence Rae
(Canada)

Trip Allowance

Trip Allowance

We were given a large gift for a medical trip to India. I placed the money in my checking account. Is there a way to account for that trip within my checkbook while still entering the items in the register to balance at the end of the month? Or do I have to put the money in a different bank account to track the expenditures for the trip while I balance my present checkbook?

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Jul 26, 2023
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Medical Trip Expense Tracking
by: BB

Yes, there is a way to account for the medical trip to India within your checkbook while still tracking the trip expenditures. You don't necessarily need to open a different bank account for this purpose. Here's how you can do it:

Create a separate category: Within your checkbook or accounting software, create a new category specifically for the medical trip expenses. You can name it "Medical Trip to India" or something similar.

Record the gift deposit: When you receive the large gift for the trip, record it as a deposit in your checking account. Categorize it under "Medical Trip to India" to keep track of the funds for the trip separately.

Track trip expenses: As you incur expenses related to the medical trip, record them as usual in your checkbook or accounting software. Make sure to categorize each expense under "Medical Trip to India."

Regular balancing: At the end of each month, continue balancing your checkbook as you normally would, including all the transactions related to the medical trip under the designated category.

By using a separate category, you can easily track the expenses for the medical trip without the need to open a new bank account. It allows you to keep a clear record of the trip's costs and ensures that your regular checkbook balance remains accurate.

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Accounting Dissolution Owner Changes

by Maureen Labrador
(Philippines)

Accounting Dissolution Owner Changes

Accounting Dissolution Owner Changes

Admission by investment of assets.

Partners Gonzaga and Magada have capital account balances of P30,000 and P20,000, respectively, and they share profits and losses in a 3:1 ratio.

How would you prepare the journal entries to record the admission of Ortiz under each of the following conditions:

1. Ortiz invested P30,000 for a one-fourth interest in net assets; the total partnership capital after Ortiz's admission will be P80,000.

2. Ortiz invested P30,000, of which P10,000 is a bonus to Gonzaga and Magada. In conjunction with the admission of Ortiz, the carrying amount of the inventories is increased by P16,000. Ortiz's capital account is credited for P20,000.

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Jul 26, 2023
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Accounting Dissolution Journal Entries
by: BB

Journal Entries for Ortiz's Admission (Investment of P30,000 for 1/4 Interest in Net Assets):

a) To record Ortiz's investment of P30,000:
Cash (Ortiz's Investment) 30,000
Ortiz's Capital 30,000

b) To adjust Gonzaga and Magada's capital accounts:
Gonzaga's Capital 22,500
Magada's Capital 7,500
Retained Earnings 40,000
(To adjust the total partnership capital to P80,000)

Journal Entries for Ortiz's Admission (Investment of P30,000 with P10,000 Bonus and Increased Inventory Carrying Amount):

a) To record Ortiz's investment of P30,000 and bonus to Gonzaga and Magada:
Cash (Ortiz's Investment) 30,000
Gonzaga's Capital 3,750
Magada's Capital 3,750
Ortiz's Capital 10,000

b) To adjust Gonzaga and Magada's capital accounts for the increased inventory carrying amount:
Gonzaga's Capital 12,000
Magada's Capital 4,000
Inventory 16,000

Note: The above journal entries assume that there are no other transactions involved in Ortiz's admission and that the carrying amount of the inventories increased by P16,000 due to a revaluation or adjustment in the partnership's assets.

The final capital account balances after Ortiz's admission should reflect a 3:1:1 ratio between Gonzaga, Magada, and Ortiz, respectively. It is important to consult with a professional accountant or tax advisor to ensure accurate and appropriate accounting treatment for partnership admissions.

Jun 02, 2011
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blablalb UST
by: Anonymous

1. AC CC Diff.
G 37599 30000 7500
M 22500 20000 2500
O 20000 30000 (10000)
----- ----- -----
80000 80000 0

Entry:
Cash 30000
G capital 7500
M capital 2500
O capital 20000

2.
Inventory 16000
Gonzaga 12000
Magada 4000

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Accounting For Donations

Accounting For Donations

Accounting For Donations

How would I record cash earned from selling cookies or from a car wash?

Would I list it under the title under donations?

Thanks!

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Aug 25, 2018
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Bookkeeping For Donations
by: Stephanie

Thank you for your question about how to categorize money received from fundraising.

Typically, money received from fundraising would be categorized as donation or fundraising income.

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Accounting for Free Food

Accounting For Free Food

Accounting For Free Food

When a restaurant gives a complaining customer a free meal how does the bookkeeper account for this?

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Aug 25, 2018
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Accounting For Free Customer Meal
by: Anonymous

Thank you for your question about how to do the bookkeeping for giving a free meal to a complaining customer.

Typically, this would be categorized as a type of food shortage or customer discount that could be a subcategory of food purchases.

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Accounting for Gratuities

Accounting For Gratuities

Accounting For Gratuities

What is the best way to account for tips when it comes to debit and credit cards?

I assume that tips will be included in my sales and deposited into my bank account.

What is the best way to then take tips out of my sales account to reconcile it?

Tips payable or something like that?

Thanks very much!

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Aug 25, 2018
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Accounting For Tips
by: Anonymous

Thank you for your question about how to account for tips and gratuities received and taken out.

When you receive tips it would be recorded as:

DEBIT BANK ACCOUNT
CREDIT TIPS INCOME

When you take tips out of sales that don't get deposited it would be recorded as:

DEBIT CASH DEPOSIT
CREDIT TIPS INCOME
DEBIT TIPS EXPENSE

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Accounting For Photography And Food

by Mark
(NH)

Accounting For Photography And Food

Accounting For Photography And Food

I imagine this is some kind of expense, but how would you categorize it?

Our food production related product requires recipe research and food photography to create content for website and other marketing materials.

Is it a marketing expense, R&D expense, etc.

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Aug 25, 2018
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Production Related Expense Category
by: Stephanie

Great question about how to categorize production related photography and food purchases.

I would be inclined to classify this as a Research and Development (R&D) expense.

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Accounting T Accounts Question

by Rekha
(Canada)

Accounting and Bookkeeping

Accounting and Bookkeeping

Set up the following 10 t-accounts on a sheet of blank paper:

Cash (or bank);
Office Equipment;
Furniture & Fixtures;
Delivery Equipment;
Land;
Building;
Accounts Payable/Hill Office Furniture Co;
Accounts Payable/Murry Auto Sales;
Bank Loan Payable;
Capital, W. Stubbs.

Using the process of analyzing transactions, record the following transactions directly into the t-accounts:

Feb 1. William Stubbs, the owner invested $75,000 cash in a hardware store

Feb 2. borrowed $20,000 from the bank

Feb 3. bought a building and land for $80,000. The building is valued at $63,000 and the land at $17,000. Paid by cheque.

Feb 4. bought a cash register for $950. Issued a cheque.

Feb 5. bought a desk and chair for the office for $1,200 on account from Hill Office Furniture Co.

Feb 6. bought a used delivery trunk for $6,100 on account from Murray Auto Sales

Feb 7. made a partial payment on the bank loan $500

Feb 8. paid hill office furniture co $400 on account

Feb 9. bought an electronic calulator from Hill Office Furniture co for $150. Paid $50 cash and agreed to pay the balance in 10 days.

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Jun 11, 2018
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Accounting T Accounts Bookkeeping Answer
by: Stephanie

CASH/BANK
________________________________
Feb 1. 75,000 - DEBIT
Feb 2. 20,000 - DEBIT
Feb 3. 80,000 - CREDIT
Feb 4. 950 - CREDIT
Feb 7. 500 - CREDIT
Feb 8. 400 - CREDIT
Feb 9. 50 - CREDIT


OFFICE EQUIPMENT
________________________________
Feb 4. 950 - DEBIT
Feb 9. 150 - DEBIT


FURNITURE & FIXTURES
________________________________
Feb 5. 1,200 - DEBIT


DELIVERY EQUIPMENT
________________________________
Feb 6. 6,100 - DEBIT


LAND
________________________________
Feb 3. 17,000 - DEBIT


BUILDING
________________________________
Feb 3. 63,000 - DEBIT


A/P - HILL OFFICE FURNITURE
________________________________
Feb 8. 400 - DEBIT
Feb 5. 1,200 - CREDIT
Feb 9. 100 - CREDIT


A/P - MURRY AUTO SALES
________________________________
Feb 6. 6,100 - CREDIT


BANK LOAN PAYABLE
________________________________
Feb 2. 20,000 - CREDIT
Feb 7. 500 - DEBIT


CAPITAL W. STUBBS
________________________________
Feb 1. 75,000 - CREDIT

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Correction of Accounting Errors


(CA)

Accounting Corrections

Accounting Corrections

1. Which of the following errors would not be revealed by the trial balance?

a. A sale debited to accounts receivable for $500 and credited to sale for $50?
b. A rent check debited to rent expense for $975 and credited to cash for $795?
c. Collection of receivables debited to cash for $300 and credited to accounts payable for $300?
d. Payment of an account debited to accounts payable for $1000 and debited to cash for $1000?

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Jul 26, 2023
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Trial Balance Errors
by: BB

The error that would not be revealed by the trial balance is c. Collection of receivables debited to cash for $300 and credited to accounts payable for $300.

Explanation:
The trial balance only checks if the total debits equal the total credits in the ledger. In option c, the error involves recording the collection of a receivable, but incorrectly crediting it to accounts payable instead of cash.

This type of error would still result in the trial balance showing equal debits and credits, as both sides of the transaction are balanced, even though the accounts involved are incorrect. Therefore, the error in option c would not be revealed by the trial balance.

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Financial Accounting

by David
(jhb)

Financial Accounting

Financial Accounting

Why do total assets equal total equity and liabilities on both balance sheets?

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Jul 26, 2023
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Accounting Equation Explained
by: BB

Here's why the equation holds true:

Assets: These represent what the company owns, such as cash, inventory, property, and equipment. When assets increase (e.g., through sales or investments), they are usually financed by either liabilities or equity.

Liabilities: These represent the company's obligations to external parties, such as loans, accounts payable, and other debts. When liabilities increase (e.g., by taking out a loan), the funds are used to acquire assets.

Equity: This represents the ownership interest in the company, including retained earnings and contributed capital. When equity increases (e.g., through profits or additional investments), it contributes to the funding of assets.

So, to maintain the accounting equation, the total value of assets must equal the total value of liabilities and equity on the balance sheet. This balance ensures that every financial transaction is accurately recorded, and the financial position of the company is correctly represented.

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Nonprofit Audio CD Accounting

by Jason
(Fawn Grove, PA, USA)

www.sycp.us

www.sycp.us

As a nonprofit podcast corporation in Pennsylvania, we produce audio CDs of our podcast and generously donate them to local public libraries. To streamline our process and avoid creating audio CDs of archived episodes, we have priced these CDs at $12.00 each, considering factors like time, materials, and postage. Recently, I purchased 100 blank CDs for $14.00.

Now, with 40 episodes, our donation to the libraries is technically valued at $480. For this transaction, I can debit the Expenses account for $480 to account for the cost of producing and donating the audio CDs. However, since there was an initial value of $14.00 for the blank CDs, I need to appropriately credit another account to reflect this added value.

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Jul 26, 2023
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Nonprofit Audio CD Donations
by: BB

To correctly account for the transaction, you can follow these steps:

Debit the Expenses account for $480 to record the cost of producing and donating the audio CDs.
Credit the Inventory or Supplies account for $14.00 to reflect the initial value of the blank CDs used to create the audio CDs.

Credit the Revenue or Donations Received account for $466.00 (the difference between $480 and $14) to account for the value added from $14.00 to $480.00.
By doing this, you accurately represent the expenses incurred for producing the audio CDs and the value of the donated CDs to the libraries.

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Non-Profit Accounting in For-Profit Company

by Jonas
(Kampala, Uganda)

Non-Profit Accounting

Non-Profit Accounting

I need to handle the accounting for three companies, each operating in different countries with distinct accounting systems. The first company is a commercial company in Uganda, the second is a commercial company in Congo, and the third is a non-profit organization also located in Congo.

All these companies are owned by the same person, but there are no other direct links between them. The Congolese company mainly acts as a plantation with the Ugandan company as its primary client. The accounting system/rules in Uganda follow the English standards, while in Congo, they adhere to the Belgian/French standards.

I have encountered several challenges and would appreciate any assistance with the following:

How do I record a grant received by the commercial company? We are supported by fair-trade organizations, and they provide us with grants to aid our activities.

How do I handle a repayable grant? This is a loan without interest, but there are administrative costs associated with it.

Sometimes, we receive a grant in our Ugandan bank account, but it's meant for the Congolese company. How should I record this transaction accurately?

What entries should I make when transferring money in cash from Uganda to Congo?

If we purchase assets in Uganda and later transfer them to our Congolese company, how do I account for this transaction?

We are allowed to allocate a portion of our employees' salaries as an own-contribution in-kind to a project, as required by the grant. How should I record this contribution?

Can I record accumulated depreciation in the French accounting system? I want to track the original purchase price and all depreciation over time for our assets.

In our African context, we often provide advances for services yet to be delivered. Unfortunately, some individuals may disappear without providing the promised services. How do I handle this situation in the books?

When should packaging material be considered an asset, an expense, or part of the equity?

Any help or advice regarding these accounting challenges would be greatly appreciated! Best regards, Jonas





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Jul 26, 2023
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International Non-Profit Accounting
by: BB

To record a grant received by the commercial company, you would credit the grant amount to the income account or a specific grant revenue account and debit the appropriate cash or receivables account.

For a repayable grant, you would credit the grant amount to a liability account (e.g., Repayable Grants Payable) and debit the appropriate cash or receivables account. The administrative costs related to the grant can be expensed.

When you receive a grant in your Ugandan bank account, but it's intended for the Congolese company, you should record it as a transfer from one company to another. Debit the appropriate asset account in the Congolese company and credit the same amount in the Ugandan company's cash account.

When transferring money in cash from Uganda to Congo, you would debit the cash account of the Ugandan company and credit the cash account of the Congolese company.

To account for the purchase of assets in Uganda and later transferring them to the Congolese company, you would debit the asset account in the Ugandan company and credit the asset account in the Congolese company.

To book the allocation of employees' salaries as an own-contribution in-kind, you would debit the project expense account and credit the appropriate salary expense account.

In the French accounting system, you can record accumulated depreciation by crediting the asset account and debiting the accumulated depreciation account.

If you provide advances for services yet to be delivered and some individuals fail to fulfill their obligations, you should treat the unfulfilled advances as bad debts and create a provision for doubtful debts.

The treatment of packaging material as an asset or an expense depends on the accounting policy of your organization. If the packaging material is significant and reusable, it can be treated as an asset. Otherwise, it may be expensed as part of the cost of goods sold.

Please note that these answers are general guidelines, and it's essential to consult with a professional accountant to ensure accurate and compliant recording of transactions in your specific circumstances.

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Proprietary Concern Accounting

Proprietary Accounting

Proprietary Accounting

A proprietor maintains his savings account in the company books of accounts. He received some amount after selling his personal property which he deposited in his saving account.

What Entry should I Pass?

Is it: Bank A/c Dr?
To proprietor capital A/c

or

Bank A/c dr.
To Sale of property A/c.

Kindly note he invested the received amount in another company.

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Jul 26, 2023
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Capital Investment in Business
by: BB

To record the transaction correctly, you should pass the following entry:

Bank A/c Dr.
To Proprietor's Capital A/c

Explanation: The amount received after selling the personal property is a capital contribution made by the proprietor to the business. Therefore, it should be credited to the Proprietor's Capital account, indicating an increase in the owner's equity. The cash is debited to the Bank account as it is the asset received.

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Starting A Business Accounting

Starting A Business Accounting

Starting A Business Accounting

How can one do the accounting for starting a business with cash Rs currency 32,000 and bank loan of Rs currency 68,000?

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Aug 25, 2018
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Business Start Accounting
by: Stephanie

Thank you for your question about how to do the accounting for starting a business.

The journal entry transaction for starting a business with cash of 32,000 and balance loan of 68,000 would be:

DEBIT BANK ACCOUNT (ASSET) 32,000
CREDIT OWNER'S CONTRIBUTION (EQUITY 32,000

DEBIT BANK ACCOUNT (ASSET) 68,000
CREDIT BUSINESS LOAN (LIABILITY) 68,000

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