Financial Accounting

Statement of Cash Flow Investing Activities -Cash Paid for Equipment

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Statement of cash flows investing activities will look at cash flows related to investing activities. Investing activities will include cash flows from investments like stocks and bonds but also includes investments in long term assets like property plant and equipment. Cash outflows and cash inflows for property plant and equipment will be included in the investing activities section. Because equipment is often financed when purchased we often need to look at the detail of the transaction to complete the investing activities section.
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Financial Accounting

Corporation Comp. Prob. Worksheet 10

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Corporation comprehensive problem will cover the worksheet we will use for a comprehensive corporation accounting problem. The worksheets will be in PDF format and available for download so that we can work through the problem. We can work through the entire problem with one worksheet or we can print a new PDF worksheet for each step along the way, each worksheet containing the number us to the point we are working on.
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Financial Accounting

Partnership Comp Prob Draws -130 How to Record Journal Entry For Withdraws

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Partnership journal entry for draws will record the journal entry related to withdraws. We will enter the journal entry into the general journal, post it to the general ledger, and create the trial balance from the general ledger. The accounting transaction will debit draws and credit cash.
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Financial Accounting

Note Payable Journal Entry-Journalize the Journal Entry for Installment Note

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Notes payable journal entry will journize the journal entry to record an installment note. We will enter the accounting transaction into a general journal and then post the transaction to a worksheet so we can see the impact on individual accounts and the accounting equation. The transaction to record a loan is surprisingly simple, but can be confusing because of the added information we have which is not needed for the initial journal entry. For example, we we will often know the interest rates and installment payment amounts but the interest rate is not needed for the initial recording of the financial transaction. Interest in not recorded at the start of the note because no time has passed. Interest is like rent owned on purchasing power of money. At the time we take out a loan no rent or time or interest has accumulated.
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Financial Accounting

Proprietor Comp Prob Pay Expenses-120 Journal Entries to Pay Monthly Expenses With Cash

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Sole proprietorship pay monthly expenses with cash will record the journal entry to pay normal monthly expenses including utilities, telephone, and wages. We will enter financial transactions into the general journal, post them to the general ledger, and then build the trial balance from the general ledger. The journal entries will be a debit to expense and a credit to cash.
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Financial Accounting

Statement of Cash Flows Strategy – Cash Flow Thought Process

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Statement of cash flows strategy will go over how we can think about cash flows. The most obvious and direct way to think about cash flows is to think about the change in cash over a time period. To analyze a change in cash we can go to the general ledger to look at the detail of activity that happen for a period of time. The general ledger will show transactions related to cash by date. Although this method makes the most since is does have problems. The cash account will have a lot of transactions in the general ledger, more them most any other account. It may be difficult to re-categorize each transaction. We can also think about the cash flow using the accounting equation, and this is often the approach we will use in practice.
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Financial Accounting

Notes Payable Payments Journal Entry – Payment on Installment Note Using Amortization Table

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Notes payable payments journal entry will enter the journal entry for making a payment on an installment note using an amortization table. We will enter the transaction in the general journal, post it to the general ledger, and see the effect on the trial balance. To record a financial transaction for the payment of an installment note we need an amortization table to determine the amount allocated to interest and the amount allocated to principle. Although the payment amount will often not change on an installment note, the amount allocated to interest and principle will change with each payment. We will enter a journal entry debiting interest expense, debiting notes payable, and crediting cash. The accounting transaction for payment on installment not will decrease cash, increase expenses, decrease the principal portion of the note, bring net income down, and bring total equity down.
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Financial Accounting

Corporation Comp Prob Revenue for Cash – 110 Journal Entry to Record Cash Received for Work Done

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Corporation comprehensive problem journal entry to record cash received for work done will record the debits and credits for the financial transaction.
We will record the accounting journal entry in the general journal, post it to the general ledger, and create the trial balance from the general ledger.
We will debit cash and credit revenue. This is our favorite journal entry when we see both cash and revenue increase.
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Financial Accounting

Statement of Cash Flows-Direct Method vs Indirect Method

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Statement of cash flows direct method vs indirect method will compare and contrast the direct method and indirect method forms of the cash flow statement. When comparing the direct and indirect method we are focusing in on the cash flows from operation section of the statement of cash flows as opposed to the financing or investing sections. In other words, the financing and investing sections will remain the same under either method. The direct method can be thought of as reworking the income statement line by line, adjusting each line from an accrual basis to a cash basis. The direct method makes intuitive seance and and is easy to explain to readers but is the less used method. One reason is that the indirect method is often required even if the direct method is used. The indirect method provides a kind of reconciliation between net income on an accrual method and net income on a cash method or cash provided by operating activities. The bottom line should be the same using either the direct or indirect method.
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Financial Accounting

Statement of Cash Flow Direct Method – Make Statement of Cash Flows Using Direct Method

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Statement of cash flows direct method will construct the statement o flows using the direct method. The direct method is less common then the indirect method for multiple reasons. One reason the indirect method is more common is that it is often required weather we use the direct method or not. In other words, we often have to use a an indirect method calculation even if we include the direct method. The indirect method provides a reconciliation between net income and cash provided by operations. The direct method generally makes more intuitive scene however. The difference between the direct method and the indirect method is found on the cash flows from operations. In other words, the cash flows from investing activities and financing activities will be the same when using either direct or indirect methods. The direct method is like taking the income statement accounts and converting each account from an accrual method to a cash method.
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