Accounting Articles

January 23, 2013

IRS classification of tax-exempt organizations like those under IRS Code 501(c)(3), 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), 501(c)(7), 501(c)(19) is described.

January 15, 2013

Companies may build (construct) some of their fixed assets because such assets may not be available for purchase from other companies or because it is cheaper to do so. An important aspect of constructing own assets from the accounting standpoint is the cost accumulation. In this article we will discuss which expenditures should be included in the cost of self-constructed assets (interest capitalization is not covered in this article).

December 5, 2012

Income taxes are usually a significant expense of a company. For example, many corporations pay income taxes in 30-40% range. In this article, we will discuss a basic concept that applies to the payment of federal, state, or local income taxes. We will limit our discussion to taxes paid by corporations. We will not cover, in this article, temporary differences and the allocation of income taxes between financial statement periods. These topics will be discussed in later articles.

November 29, 2012

Declining balance methods of depreciation, specifically the double-declining balance method, do not take into consideration the salvage value of an asset when determining the depreciable basis. Some people wonder why that is the case. This article provides the answer.

November 23, 2012

There are two types of working capital: permanent working capital and temporary working capital. In this article you will learn the difference between the two and how each of them can be financed (funded).

November 14, 2012

Notes receivable and how they are different from accounts receivable as well as an example of journal entries involving notes receivable.

November 2, 2012

US GAAP allows application of alternative accounting principles to certain types of accounting transactions or balances. Investors, creditors, and other users of financial information need to understand which accounting principles are utilized by a company. Such principles are to be described in the summary of significant accounting policies.

October 24, 2012

Consignment inventory is one of the marketing methods used to attract customers. One variation of consignment is when a seller delivers goods to a customer (buyer) but retains the title to the goods until the buyer uses the goods. In this article we explore accounting for this type of consignment arrangement.

October 17, 2012

Budgeting is important for any organization. Preparing a master budget requires preparing financial budgets as well as an operating budget, which in turn consists of many components such as sales budget, production budget, costs of goods sold budget, etc. In this article we will learn to prepare a simple production budget, which is an important component of the operating budget. Production budget is used to prepare other components of the operating budget, including direct materials purchases budget, direct labor budget, etc.

October 11, 2012

To record and manage an asset, an organization should be able not only to identify the asset but also to measure it. This is especially important in the case of intangible assets, which can substantially increase the value of the organization. In this article we will discuss the three major valuation approaches used to measure intangible assets.

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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.