Temporary vs. permanent accounts can be a lot to digest. To help you further understand each type of account, review the recap of temporary and permanent accounts below. Now that you know more about temporary vs. permanent accounts, let’s take a look at an example of each. Your accounts help you sort and track your […]
The cloak of anticipation is lifted, and the financial ballet takes a turn. Common examples of prepaid expenses include leases, rent, legal retainers, advertising costs, estimated taxes, insurance, salaries, and leased office equipment. In this case the asset (pre paid rent) has been reduced by 1,000 and the income statement has a rent expense of […]
With FOB shipping point, the buyer pays for shipping costs, in addition to any damage during shipping. The buyer is the one who would file a claim for damages if needed, as the buyer holds the title and ownership of the goods. Contrary to some misconceptions, FOB terms are primarily concerned with the allocation of responsibilities […]
The costs of constructing the asset are accumulated in the account Construction Work-in-Progress until the asset is completed and placed into service. For example, if a company spends $500,000 on constructing a warehouse, those costs are tracked in the CIP account until the warehouse is operational. When the construction under progress is recorded proportionally in […]
Siste kommentarer