Accounting Articles

May 9, 2013

In our computerized world most accounting records are maintained in accounting software databases or spreadsheets, and accountants donít think much in terms of general ledger or subsidiary ledgers like they did when most accounting records were maintained on paper. However, such concepts still exist. In this second part of the two-part article we will look at examples of accounts payable subsidiary ledger (i.e., accounts payable aging), inventory subsidiary ledger, and fixed assets subsidiary ledger.

April 30, 2013

In our computerized world most accounting records are maintained in accounting software databases or spreadsheets, and accountants donít think much in terms of general ledger or subsidiary ledgers like they did when most accounting records were maintained on paper. However, such concepts still exist. In this first part of the two-part article we will discuss what subsidiary ledgers are and look at an example of an accounts receivable subsidiary ledger (i.e., accounts receivable aging).

April 23, 2013

In a classified balance sheet, current (short-term) and non-current (long-term) assets and liabilities are presented separately. In most cases current assets and liabilities are easy to distinguish and donít present any issues with their classification and presentation on a balance sheet. However, there are certain items which may require special treatment because they need to be separated into the current and non-current portions. In the second part of this article we will discuss two items: deferred rents and notes payable.

April 17, 2013

In a classified balance sheet, current (short-term) and non-current (long-term) assets and liabilities are presented separately. In most cases current assets and liabilities are easy to distinguish and donít present any issues with their classification and presentation on a balance sheet. However, there are certain items which may require special treatment because they need to be separated into the current and non-current portions. In the first part of this article we will discuss one of such items: prepaid insurance.

March 30, 2013

Quite often rent agreements classified as operating leases include uneven rent payment terms (e.g., escalating rent payments or rent holidays). For example, a 5-year building rent agreement may specify that rents will go up 5% every year after the first year. Some companies assume that the rent expense should be recognized based on the rent payments. However, under US GAAP this most probably wonít be true. In this article, we review accounting for lease agreements with uneven rent payments.

March 8, 2013

Fixed asset donations are rare when one talks about for-profit companies, but such donations are more common when one talks about non-for-profit companies. Fixed asset donations can be inbound or outbound. How does a company account for such donations?

February 21, 2013

Most companies purchase and use fixed assets (also called property, plant and equipment). Fixed asset costs are allocated to multiple accounting periods by recording depreciation expense. What is the impact of not depreciating fixed assets?

February 16, 2013

Learn about sunk costs and how they impact investment decision-making.

February 6, 2013

Leasehold improvements represent additions to a lease property. Accounting for such improvements normally does not present a significant issue except for their amortization. This article covers a common issue which relates to the amortization of leasehold improvements.

January 31, 2013

From time to time accounting records may present unusual account balances. For example, a customer may have a credit balance in accounts receivable or a vendor may have a debit balance in accounts payable. This article provides examples of such situations and directions on how to approach them from the accounting standpoint. Offsetting assets and liabilities is also discussed.

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Accounting Articles
Accounting Articles include guides and answers. Accounting guides explain application of accounting principles in practice. Great assistance if you are looking for real-life accounting situations. Accounting answers explain particular accounting topics suggested by our website users. Great to find quick answers for specific topics.