Acc Accounts Receivable Quiz Flashcards

the usual balance in a contra-dividend account is a:

Identifies number of records, total charges, and all accounts to which the charges of a particular vendor appear. Costs which benefit only the current period and are thus expenses. Costs which do not change in total over wide ranges of volume. The unit costs decrease as volume increases.

These products could be purchased for a variety of reasons, for example to satisfy a long-term supply contract. Examiners may find the gross receipts from these products accounted for as a part of refinery operations or in a marketing/distribution function. Regardless of the reason purchased or the operational area used, these purchased-for-resale products should not be included in DPGR. Prior to the Tax Reform Act of 1976, promoters of oil and gas drilling ventures often utilized nonrecourse loans to provide deductions for limited partners in excess of their economic investment. This practice was questionable at best and generally lacked economic substance. IRC 465 now provides that the deduction for losses incurred in oil and gas ventures cannot exceed the amount “at-risk.” .

Revenues earned and recorded in the current period even though no cash or other proceeds have been received from customers for the goods or services provided. Accrued revenues are recorded through adjusting entries with a debit to an asset account and a credit to a revenue account. The recording of sales made in December as December revenues, even though the sales price will not be collected from the customer until January, is an example of an accrued revenue.

What Do You Think Is The Normal Balance Of A Contra Account?

Distribution of dividend. A dividend has been paid but the amount is not shown in the information provided. Net income was reported as $200,000. Those profits always increase retained earnings. As a result, the beginning balance of $454,000 should increase to $654,000.

Current liabilities are listed on the balance sheet under the liabilities section and are paid from the revenue generated from the operating activities of a company. The new legislation establishes a statutory seven-year recovery period and a class life of 14 years for natural gas gathering lines. In addition, no adjustment will be made to the allowable amount of depreciation with respect to this property for purposes of computing a taxpayer’s alternative minimum taxable income. IRC 613A provides that any amount of percentage depletion disallowed because of the 65 percent of taxable income limitation will be treated as an amount allowable under IRC 613A in the following year.

the usual balance in a contra-dividend account is a:

Adjusted debit balance is the amount in a margin account that is owed to the brokerage firm, minus profits on short sales and balances in a special miscellaneous account . The debit balance, in a margin account, is the amount of money owed by the customer to the broker for funds advanced to purchase securities. As a quick example, if Barnes & Noble sold $20,000 worth of books, it would debit its cash account $20,000 and credit its books or inventory account $20,000. This double-entry system shows that the company now has $20,000 more in cash and a corresponding $20,000 less in books. The matching principle in accrual accounting states that all expenses must match with revenues generated during the period. The T-account guides accountants on what to enter in a ledger to get an adjusting balance so that revenues equal expenses.

Apportionment used to distribute expenses included in this instruction. The basis of the directly assignable pay to the various accounts. Not required to maintain the accounts of this system. Received and other assets are given or securities issued. Accounts are not considered corporate joint ventures. Also securities issued as dividends on stock.

Bad Debt Expense

Depreciation is eliminated. This year, the reported amount is $70,000 and $30,000 . As expenses, depreciation is a negative within net income. To remove these two negative amounts, they are added back to the net income figure.

The payment of a liability does not affect stockholders’ equity. It decreases an asset account and decreases a liability account .

Credit Purchase

The taxpayer has an election to amortize over 60 months the basis of any ceritified pollution control facility; refer to IRC 169. See IRC 169 for an exception of 84-month amortization period applicable to certain air pollution control facilities placed in service after April 11, 2005. The amortization deductions are subject to recapture to the extent of any gain on the sale of the facility; see IRC 1245.

the usual balance in a contra-dividend account is a:

Operators of oil and gas properties are those persons or organizations that physically operate the equipment on the leases that produce the oil and gas income. For this service, operators charge the working interest owners a fee or service charge. Usually this charge is based on the number of wells involved.

Accounts Receivable Turnover

For defined contribution pension plans this is amount of money that was contributed to the fund. The amount of an employer’s payroll taxes incurred as a result of employee salary or wage expense recorded for the current period. Employer payroll taxes incurred as a product cost would be included in direct or indirect labor costs and recorded as an expense through cost of goods sold. Decisions not typically faced in the course of normal day-to-day operations.

the usual balance in a contra-dividend account is a:

Acquisition costs of a mineral property must be capitalized. However, the taxpayer may elect to capitalize or expense IDC incurred during the exploration and development phases.

Other general ledger accounts which commonly have supporting subsidiary ledgers include inventory, property, plant and equipment and accounts payable. These accounts maintain detail that is valuable information for a company’s management. Managers must know the balance of units on-hand for each of their products as well as the total balance of all inventories.

Cash Sales

It is an increase in owners’ equity and does not consist of cash or any other specific assets. Net income is the excess of revenue earned over the related expenses for a given period. Property, plants, and equipment are properties of a durable nature used in the regular operations of a business. With the exception of land, most assets are either depreciable or consumable. The accumulated depreciation account is a contra-asset account used to total the depreciation expense to date on the asset. Lease payments for finance leases are apportioned to finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

  • Business activities intended to produce a profit.
  • Because of the need for a plan involving an entire field, several owners may be involved.
  • In addition, the cracking and other processes not only increase the quantity of gasoline, but also the quality.
  • The normal balance is defined as the balance which would show either credit or debt when all the data from the journal is extracted.
  • There are other elections the taxpayers can make in order to receive the maximum tax benefits available to oil operators.
  • The same as Net Present Value except the present value of all cash inflows and outflows is determined to a common point in the future rather than the present.

Highway crossing protection (accounts XX-51-59, XX and XX-51-61). Removal (accounts XX to XX-19-38, inclusive). Shall be the same for both the dependent and independent accounts. Railway plant and equipment and in respect of securities outstanding. Relative to the transportation of persons or cancellation. And other records which record personal settlement. Annual reports or statements to stockholders.

Understanding Capital And Financial Accounts In The Balance Of Payments

For instance, if a promoter has acquired a lease on 3,000 acres and lacks the necessary funds to drill a test well, an offer of a 6/8 interest in the lease in return for drilling a well may ensue. The drilling contractor will incur 100 percent of the drilling cost in return for a 75 percent interest in the 3,000 acre lease. Since the driller is entitled to only 75 percent of the working interest oil, 25 percent of drilling costs and equipment costs as leasehold cost must be capitalized.

Unlikely Loss

1220.6 Schedule of records and periods of retention. Power for train and locomotive propulsion; and other services purchased. Receivable therefore shall be credited to this account. Deferred revenues–transfers from government authorities. Accounts payable; Interline and other balances. Property used in other than carrier operations. Net–investments and advances–affiliated companies.

Contingents Liabilities And Losses

Taxpayers have taken the position that the ordinary test is met if the corporation has no income, as long as the activity of the corporation is that of an operating company. IRC 465 generally provides that the amount of loss otherwise allowable with respect to an activity cannot exceed the aggregate amount which a taxpayer has at risk with respect to such the usual balance in a contra-dividend account is a: activity at the close of the taxable year. Each separate oil and gas property is treated as a separate activity for the purpose of IRC 465. 69–332, 1969–1 CB 87 and Rev. Rul. The adjusted basis of the leasehold is determined by taking the original cost of the property, increasing it for capital additions, and reducing it by depletion allowed or allowable.

Company

Money or other assets owned by a company. Most businesses require capital https://accounting-services.net/ to operate. In other words, it usually takes money to make money.