The Accounting Basics Blog


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Examples of FIFO Products in Real Life

Q: Give at least 5 examples of fifo in general life? A: There are many real-life examples of products that are more suited for a FIFO (First-In-First-Out)

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Owners Equity Synonym

Q: Owner's equity is also known as _____________? A: There are a few synonyms for owner's equity. As you will see in the comments at the bottom of the

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Supplies Expense Example: Accounting Equation & Journal Entry

Q: How do you account for estimated expenses in the accounting equation? For example: Estimated supplies used for 6 months R700. (R = Rands = South African

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Double Entry Exercise:
Which Accounts Are Affected?

Q: Which accounts are affected by the following transactions? (RM = Malaysian Ringgit = Malaysian currency) (Bhd. stands for Sendirian Berhad and is the

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Which Accounts Are Affected?"

Creditors, Purchases, Cost of Goods Sold Question and Answer

Balances at 31 January 2009: Debtors control account.............................$32,400 Creditors control account...........................$25,200 Inventory...................................................$30,000

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Purchase Returns Journal Entry

Q: What is the journal entry when purchases are returned? A: The short answer is that the purchase returns journal entry is just the exact opposite of

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What is the Best Way to Study Accounting?

Q: What is the best way to study accounting? A: I actually published an article on this subject a while back in one of our old newsletters. Here it is

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Order of Financial Statements

Q: The financial statements must be prepared in a particular order. Which statements are prepared first, second, and third? What is their chronological

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Accounting Equation Exercise:
Fill in the Blank

Q: The summaries of balance sheet and income statement data follow. Beginning of year: Total assets $ 85,000 Total liabilities 62,000 Total

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Fill in the Blank"

Accounting Equation Questions and Answers

Q: Tom Jones is the owner and operator of Jones Enterprise, a motivational consulting business. At the end of its accounting period, December 31, 2009,

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Journal for Partial Payment and Trade-In of Vehicle incl. Depreciation

Q: Paid $12,500 for a car which cost $20,000 with the garage accepting $7,500 in part exchange. The old car cost $22,000 and had depreciated by $5,000.

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Journal Entries and Ledger Question and Answer

Q: Mr Robert commenced business on 1st January, 2011 with a capital of $100,000 in cash. On the same date he opened the bank account in ADCB and deposited

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A Simple Trial Balance Exercise
(With Full Solution)

This is a nice, simple trial balance exercise with full solution. Try attempt this yourself before scrolling down to the solution below. See the related

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(With Full Solution)"

Full Accounting Questions and Answers

Full accounting questions and answers for you to practice for free. Great preparation for a test or exam. Journal entries, T-accounts, the trial balance and the financial statements. With full solutions and detailed explanations.

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Asset Classification & Cashier's Check

Q: I bought a business warehouse. How do I classify this asset if I paid the full amount with a cashier's check? A: This is a pretty simple transaction

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Bank Reconciliation Questions:
What is a Bank Reconciliation and the Bank Reconciliation Process?

An explanation of what a bank reconciliation is as well as the typical process involved.

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What is a Bank Reconciliation and the Bank Reconciliation Process?"

Work-In-Progress Inventory &
Stage Of Completion Valuation

Q: I want to ask how do you calculate opening work in progress inventory and closing work in progress inventory... and whether this calculation should

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Stage Of Completion Valuation
"

Questions regarding Debtors and Collecting/Settling Accounts

Q: 1. How do I determine the effectiveness of the internal control system with regards to debtors? 2. What are the strategies that I can implement to

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Cash Flow Statement and Depreciation

Q: Depreciation charged during the year will come under which activities? A: Depreciation actually does not come under any of the categories of the cash

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Credit Balance in
Purchases Ledger?

Q: I was solving an exercise of control accounts in which one of the transactions given was this: Credit balance in purchases ledger transferred from

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Purchases Ledger?"

Cash Flow Statement Question

Q: Cash flow statement shows negative from operating activities but shows positive on cash at the end of the period. Is that possible? A: Yes, this is

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Which Accounts are Affected by these Transactions?

Q: Which accounts are affected in each of the following transactions? April 3 Purchased office supplies on account, $300. April 4 Received prepayment

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Cheap College Books - Some Great Resources I Found

Here are a few great resources I found on cheap college books, including renting and selling back your textbooks.

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Accounting Journals:
Gift, Sale, Discount & Carriage Paid By Another

Q: What are the journal entries for the following: 1) Received gift of Rs 51,000 from father-in-law by check, which is deposited into business bank account.

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Gift, Sale, Discount & Carriage Paid By Another
"

Journal Entries Accrual Items Question

Q: I want to know how do you make the following journal entries (rs = Rupees = Indian currency): 1. Outstanding expense - rs 3,000 2. Accrued interest

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Journal Entry for Credit Card Sales Transaction

Q: Prepare the journal entries for the following credit card sales transactions (the company uses the perpetual inventory system): Sold $3,000 of merchandise

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T-accounts: Entry for Complex Capital Investment

Q:Owner invested PHp (Philippine Pesos) 500,000 cash along with computer equipment that had a market value of php. 120,000 two years ago but was now worth

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Define Capital Structure

Q: What is the meaning of capital structure? A: The term capital structure refers to the structure of capital (equity) for a business. Actually more often

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Where to Study Accounting - College Search

Deciding on a college where you'll study accounting can be a bit scary. Use our search tools here to find accounting colleges and classes across the US.

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What is a Folio?

Q: What is a folio? A: It's a cross-referencing code, usually a number or a few numbers and letters. It connects two separate records, such as connecting

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Accounting Question - LIFO Method

Why would tax accountants prefer to use last-in-first-out method?

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Income Statement - Six Month Period (Multiple Choice Question)

If the income statement covered a six month period ending on November 30, 2010, the third line of the income statement would read: A. Month ended November

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Indirect Method of Cash Flow Statement

What is the complete format of the indirect method of the cash flow statement?

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Pricing System - FIFO, LIFO and Weighted AVerage

There was an opening balance of 100 units which had a value of #3900. Bought: may 100units @ #41, june 200units @ #50, august 400units @ #51.875, sold:

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enter the unadjusted trial balance onto a work sheet

Enter the unadjusted trial balance onto a work sheet and close off the temporary accounts (income, expenses, drawings, etc.), leaving only the permanent

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Side and General Ledger Account (Discount)

Q:Which one of the following alternatives represents the side and general ledger account to which the total of the discount column in the cash payments

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Ledgers

Q: What type of ledgers are there? A: 3 ledgers: - General Ledger - Debtor's Ledger - Creditor's Ledger

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Perpetual Inventory Write-offs

Q: Is perpetual inventory write-offs done on quarterly basis a healthy practice or not? A: Depends on what the inventory is. If it is a product that goes

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