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Secured versus Unsecured Bonds

Comparison between Secured and Unsecured Bonds Unsecured bonds, called debentures, are issued without any security to back them. Investors purchase them based on the creditworthiness of the company. Some bonds arc secured by the borrower’s collateral or specified assets. These secured bonds are often referred to as mortgage bonds.

At What Point Should You Escalate Overdue Accounts Receivable?

Almost every business out there sells on credit. But not all customers who buy on credit meet their debt payment terms. That’s why, despite having attractive sales figures, many businesses suffer from sluggish cash flow. It’s not always the mistake of the customers, though. In many cases, it’s because businesses have failed to establish strong …

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Differences between accounting and taxable income

As we know there are various differences between generally accepted accounting principles (GAAP) and the provisions of the Internal Revenue Code (IRC). These differences result from the varying objectives of GAAP and the IRC. The objectives of GAAP are aimed at providing investors and other users of financial statements with reliable and relevant financial information. …

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Disposal of Property, Plant or Equipment

Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins. No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. These concepts …

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Accounting for Revenue and Capital Expenditures

Subsequent expenditures made on property, plant, and equipment can be in the form of either capital or revenue expenditures. As we noted, the distinction between the two is often hazy and depends on the accounting policies developed by management. However, the distinction is important because it affects the determination of current and future periods’ income. …

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Is It Legal to Hire Someone for Writing Essays for Accounting Students?

Many accounting students who write term papers on their own simply do not understand what is the difference between those projects that they wrote themselves and received high marks, and those that are purchased. We are ready to show with a few examples of what the difference is between professionally written works and those that …

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How to measure the acquisition cost of property, plant and equipment?

According to the FASB, “the historical cost of acquiring an asset includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use.” In terms of property, plant, and equipment, this means that all the reasonable and necessary costs required to get the asset to its location and ready …

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Aging method of accounts receivable/Uncollectible accounts

What is the aging method? – Explanation The aging method is based on determining the desired balance in the account Allowance for Uncollectible Accounts. The accountant attempts to estimate what percentage of outstanding receivables at year-end will ultimately not be collected; ‘this amount becomes the desired ending balance in the Allowance for Uncollectible Accounts, and …

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Credit Policy

What are credit policies? – Definition A firm could adopt a very conservative credit policy and extend credit only to customers with excellent credit ratings. Although this type of policy virtually eliminates bad debts or uncollectible accounts, the firm can lose sales and profits by not extending credit to individuals or firms with less-than-perfect credit …

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Prepping for a New Year: How Your Business can Resolve to Improve its Bottom Line

The beginning of a new year is the perfect time for businesses of all kinds to make a few important operational or financial changes. Businesses across the world will resolve to improve cash flow, increase revenues, or find other ways to improve their bottom line. However, while creating resolutions is undeniably a productive step in …

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Goods in transit

What is meant by goods in transit? Definition Goods in transit are goods that have been purchased but have not yet been received by the purchaser. These goods can be easily overlooked when counting the ending inventory because they are not physically located at either the seller’s or the purchaser’s warehouse. Accounting Treatment of goods …

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General Ledger Practical Problems and Solutions

Problem No.1: (Opening a Factory Ledger) The following balance appeared in the books of Marry & Company on December 31, 2018.   Cash $39,000 Accounts Receivable 15,000 Stores 21,000 Work-in-process Materials 10,000 Work-in-process Labour 7,000 Work-in-process factory overhead 8,000 Finished Goods 14,000 Machinery & Equipment 1,36,000 Land & Building 2,40,000 Capital Stock $2,50,000 Retained Earnings …

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Job Order Costing Examples, Practical Problems and Solutions

Problem No. 1: (Job Order Costing Cycle) The Excellent Company had the following inventories on April 1, 2019: $ Raw Material 50,000 Finished Goods 28,000 WIP – Material 2,000 WIP – Labour 30,000 WIP – FOH 12,000 During the month the cost of material purchased was $120,000, direct labor cost incurred was $160,000 and factory …

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Common Dollar Statements Definition

What is meant by the common dollar statement? The financial statement in which the appropriate total figure is set to 100%, and in which other items are expressed as a percentage of that figure.

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