The Accounting Basics Blog


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The Accounting Basics Blog lets you know whenever there is a new accounting question, lesson, article of interest, exercise, tutorial or other update to the Accounting-Basics-for-Students website.

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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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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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Purchases, Cost of sales,
Control accounts

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

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Control accounts
"

Balance Sheet, Statement of Owner's Equity and Income Statement

Q1: The three primary financial statements that we have seen so far are the Balance Sheet, Statement of Owner’s Equity, and the Income Statement. Please

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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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Accrued Expenses and Revenue:
Closed or Not?

Q: Does accrued expenses and revenue need to be closed at the end of the accounting period? A: First let's make sure we understand what accrued expenses

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Closed or Not?
"

Accounting Entry for Giving Away a Free Sample

Q: What entry will be passed in the general journal for goods taken as a free sample? A: The first thing to work out here is whether free samples would

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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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Financial Statements and Investors

Q: How are the balance sheet, income statement, statement of owner's equity and statement of cash flow useful for investors? 1. Balance Sheet The balance

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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?"

Purpose of Cashflow Statement

Q: Please what is the main purpose of preparing a cash flow statement in an organization? A: Very good question. The purpose of the cash flow statement

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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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Equity - Distributed and Undistributed Profits

Q: What is the share of undistributed profits? Do we have distributed profits? A: Yes, there is something called undistributed profits and there is

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Fill in the Blank Questions:
Basic Accounting Equation and Changes to Owners Equity

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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Basic Accounting Equation and Changes to Owners Equity
"

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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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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incl. Depreciation
"

Journal Entries

Q: Write the journal entries for the following transactions: Jan 1 Shayam commenced with cash 15,000. Jan 10 Returned goods to Krishna 350. A: Entries

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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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Is cash flow affected

Q: Is cash flow affected for a company when they have entered into a terms agreement with their customers and no longer receive cash upfront, but sales

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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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Unclaimed Expenses

Q: There are some expenses have not been claimed by the directors. What the double entry will be? A: Probably the following: DR Unclaimed expenses CR

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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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Owner's Equity Decrease?

Q: If an owner withdraws $200 of office supplies for personal use is this a decrease in office supplies AND a decrease in owner's equity? A: Yes it is.

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Accrued expenses paid but not previously recorded

Q: How are wages paid but not previously recorded accounted for? A: As far as I understand it would be the same as if one were just recording paying wages

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