Duane R. Milano's Accounting II Essentials PDF
By Duane R. Milano
REA's necessities offer speedy and simple entry to serious info in various diversified fields, starting from the main easy to the main complicated. As its identify implies, those concise, finished learn courses summarize the necessities of the sector lined. necessities are worthy whilst getting ready for checks, doing homework and may stay a long-lasting reference resource for college students, academics, and execs. Accounting II comprises present liabilities, long term liabilities, bonds, partnerships, organizations, profits and dividends, consolidations, assertion of money flows, and monetary assertion research.
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As an example, assume that on March 15, 1999, Smith Corporation borrows $100,000 from its bank for 90 days. Interest is payable at maturity and accrues as a rate of 12%. 1. 1 The Sample Company General Journal On June 15, 1999, Smith Corporation repaid the loan plus $3,000 interest ($100,000 × 12% × 90/360). In this instance, a 360-day year is used for interest calculation. 2. 4 LIABILITY FOR SALARIES AND WAGES Employees are rarely paid on a daily basis. Instead, a business accrues liability for payroll between pay dates (usually bi-weekly).
5 WARRANTIES A business may have liabilities that, while quite real, can only be estimated. A company which sells appliances with warranties can incur this kind of liability. In such situations, the company guarantees free repair within a specified period of time in the event of a problem with their product. The estimate of the probable expense of such repairs may be based on prior experience. In such a case, the liability for warranties might be a percentage of total sales in a given period. For example, assume the Sample Company sells 200 refrigerators in 1992 with one year warranties.
This could be for any of a number of reasons. There could be gains on the liquidation, or losses. It would also be possible to have deficiencies in capital in the case of losses on a liquidation. In this case, the personal assets of the partners would be at risk. 1 CORPORATION DEFINED A corporation is a legal entity with an existence separate and distinct from its owners. A corporation has many of the powers accorded to individuals. A corporation can own property and enter into contracts in its own name.
Accounting II Essentials by Duane R. Milano