Essay on Codification

According to our text, “Not-for-profit organizations lack a residual ownership claim and the organization’s purpose is something other than to provide goods and services at a profit.” “Because significant resources are provided to governments and not-for-profit organizations, financial reporting by these organizations is important.” (Page 2).

The entries used to record the disposition when the receivables are sold to a factor often detail the cash received plus the service charge. The company can then balance their receivables account. When a credit card company records a credit card

(b) Recorded an adjusting entry to record use of $20 of the above supplies. Cash 0/ Net Income -20

In this paper I have defined accrual and cash basis accounting. Also, I have answered the following questions: Explain the difference between the accrual basis of accounting and the cash basis of accounting. What are the major reasons for using accrual accounting? What are the purpose of a journal and a ledger? Give an example of a contra-asset, and explain how it is recorded on the ledger as a transaction. Explain what a “prepaid expense” is and how it is recorded on the ledger as a transaction. What are the major differences in recording transactions for a for-profit organization versus a not-for-profit, or are there any? List and record each transaction

Adjusting entries have four types in which provide a method of breaking down transactions. When a business purchases supplies in order to stock, this would be considered a prepaid expense. After an adjusting entry is made for a prepaid expense, the ledger would reflect the correct portion of that expense, in this case supplies, in which was incurred during a specific time. (Editorial Board, 2012, p. 42) A depreciation expense is a sub category of a prepaid expense. This occurs when an asset is allocated over a certain amount of time. An

Decrease an asset and increase another asset. Credits decrease an asset and increase another asset.

As for this code FASB explains that plant and equipment as airframe modifications in aircrafts that enhance the use of the aircraft should be capitalized. It also explains overhaul cost and how air carriers shall adopt accounting methods that will help them recognize overhaul expenses in the appropriate period.

  * On August 1, the center began to pay rent in 6-month installments of $24,000. Mary wrote a check to the owner of the building and recorded the check in Prepaid Rent, a new account.

The rules of debit and credit determine how to record increases and decreases. Debits are always recorded on the left side of a T-account and credits on the right side. Increases in assets are a debit and decreases are a credit. Increases in liability and stockholders’ equity are credits and decreases are debits.

This course focuses on principles of accounting for the non-accounting student. Emphasis will be placed on the accounting equation and transactions, financial statement preparation and analysis, internal controls, regulatory environment, compliance, and global business implications.

This paper will examine budgeting procedures for profit and non-profit businesses and compare similarities, and if they exist, differences in accounting practices. This paper will also attempt to review what is Generally Accepted Accounting Procedures (GAAP) for budgeting for any organization to be successful.

Account receivables accounts for purchases which consumers have not yet aid for. This takes cares of any losses that the firm might incur due to allowing credit to certain clients. Bad debts are recorded in the income statement and they represent the des which the company doesn’t expect to be paid back. The account

The process of recording and posting the effects of business transaction is done in a double entry t-form. The total dollar amount of debits must equal the total dollar amount of credits, with debits to the left and account credit to the right. Broken down, Assets = Liabilities + Stakeholder Equity. “Since debits increase assets, expense, and dividend accounts, they normally have debit balances. Conversely, because credits increase liability, capital stock, retained earnings, and revenue accounts, they normally have credit balances.”( Edwards, J. D., Hermanson, R.H., & Maher, M. W. (2011). p.84)

To account for inventory, the company uses, first in first out policy. Property plant and equipment are recorded at cost less the accumulated depreciation amount. Depreciation is charged on straight line method

GAAP is exceptionally useful because it attempts to regulate and normalize accounting definitions, assumptions, and methods. Because of generally accepted accounting principles one is able to presuppose that there is uniformity from year to year in the methods that are used to prepare a