Category: Advanced Bookkeeping
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Bookkeeping – Estimating Warranties (Lesson 86)
Warranties are assurances to customers that the product sold or service rendered will perform as stated or contracted. Often products or services are defective and therefore require replacement or repair. To properly match the cost of warranty work against the revenue generated an estimate of costs is made and recorded to cost of sales.
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Bookkeeping – Estimating Bad Debts (Lesson 85)
Tolerating non-payment is simply a part of doing business. To assist in measuring this dollar value, the accountant must estimate bad debts. This is the fifth part in the series of bookkeeping estimates within the advanced skills section of bookkeeping.
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Bookkeeping – Estimating Employee Benefits (Lesson 84)
Employee benefits consist of vacation, sick time, retirement benefits, healthcare and other de minimus benefits. As a function of accrual accounting these benefits are estimated and posted as a deferred liability in the accrued payroll section of the current liabilities section of the balance sheet. This lesson explains how to calculate the respective benefits and…
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Bookkeeping – Estimating Depreciation (Lesson 83)
Depreciation is a form of an allowance for the wear and tear (exhaustion) of property used in a trade or a commercial enterprise. The idea is to match as well as possible the actual use (utility) of the asset to its change or reduction in fair market value due to that utility.
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Bookkeeping – Estimates (Lesson 82)
There are many transactions in accounting requiring the accountant to use estimates for the respective debits and credits. The following five lessons cover how estimating is performed with depreciation, payroll benefits, bad debts, warranties and extraordinary items. This lesson explains why estimating is needed and used in business.
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Bookkeeping – Restricted Accounts (Lesson 81)
The third group of temporary accounts comprise restricted accounts. These accounts are classified with the term ‘restricted’ due to a legally mandated or contractual obligation to limit access to their funds. Most often, restricted accounts consist of cash or some physical asset.
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Bookkeeping – Regulator Accounts (Lesson 80)
Regulator accounts are non trial balance accounts used to guide and compare actual results against projected amounts. These projections are customarily stored in regulator accounts. The most common regulator account is a budget account. Other regulator accounts include counters and identifiers.
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Bookkeeping – Internal Accounts (Lesson 79)
Internal accounts are used by management to clarify information, account for interdepartmental activities and address temporary bookkeeping issues.
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Bookkeeping – Temporary Accounts (Lesson 78)
Temporary accounts are financial and process control tools used by management to achieve financial goals. They are composed of internal, regulator and restrictive accounts. They are opened at the beginning of an accounting period and closed prior to the end of an accounting cycle.
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Bookkeeping – Cost Accounting (Lesson 77)
The science of calculating the actual costs of manufacturing is known as cost accounting, a.k.a managerial accounting. Unlike traditional accounting which records economic transactions after they occur, cost accounting identifies all underlying costs associated with the production of a single unit.