It sells office supplies for $500 to General Inc. To record the transaction, debit the AR $500 and credit the office supplies account $500. A company buys goods on credit, or on account, which means there is no cash involved in the transaction.

The FICA tax rate for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The 2006 Fain financial statements contain the following selected data .

Accounting Interview Questions And Answers ›

Pass a fingerprint/background check to ensure bondability if the fund contains more than $500. Information on background checks is available from the Staff Human Resources Office. Retain the yellow copy of the form for departmental use; this copy may be used by the general ledger transaction reviewer.

All UCSC Merchants and employees must follow basic card acceptance rules for all electronic transactions. Careful and consistent adherence to the UCSC rules outlined in this section will help enhance customer satisfaction and increase your unit’s profitability. If you have any questions about any of the UCSC rules presented here, ask your supervisor for assistance. Of necessity, card acceptance procedures for these “card-not-present” transactions are different from in-store, i.e. “card present” purchases. Every day, the number of purchases conducted via mail, telephone, and internet increases. Some UCSC merchants process only in-store transactions in which the purchaser and the card are physically present in the campus unit/store.

Purchasing with Small, Diverse, and Sustainable Businesses

Generally speaking, these amounts will be equal to the present value of the liability for the future lease payments. The lease liability amounts are reduced as lease payments are made, excluding the interest expense portion of the payments, and the lease asset is amortized on a straight-line basis over the remaining lease term. Lease contracts should include a breakdown of payments to show the interest and principal portion of the transaction whenever possible. All payments for additional positions are paid through the Payroll system, taxable as additional or hourly pay, and follow all normal Payroll procedures. In short, an employee is always paid as an employee regardless of any difference in work assignments, campuses, or departments. Honoraria or other payments for the purpose of conferring distinction or to symbolize respect, esteem, or admiration may not be paid from federally-sourced grant funds. The cost of professional and consultant services paid from restricted grant funds are allowable when reasonable in relation to the services rendered and are ordinarily arranged using an Independent Contractor Agreement.

The fund custodian may establish a bank account in his or her name to administer the fund. The bank account must be opened in the name of the fund custodian; it may not be opened in any name that indicates an affiliation with the University, such as UC, UCSC, the Regents, or the department or program name.

– 108 Vehicle Rental/Insurance via PCard

If only one entry were required, the equation would be thrown out of balance. An entry adding to one side must be accompanied by an entry that either adds the same amount to the other side or subtracts the same amount from another account on the same side. This is the reason that double-entry bookkeeping has been the accounting standard for more than 500 years. For the sake of illustration only, below is an example of a simple double entry. This is the first entry that an accountant would record to identify a sale on account. Afterward, if the receivables are paid back within the discount period, we need to record the discount.

The global trade association whose members are dealers in the Swap industry. Most Swap transactions are executed under standard documentation created by ISDA. Exposure thresholds – The exposure thresholds will also be tied to credit ratings of the counterparties and whether or not collateral has been posted as shown in the table below. If a counterparty has more than one rating, the lowest rating will govern for purposes of the calculating the level of exposure.

Example of Accounts Payable

That is, we would not expect Treehouse to buy supplies at one price and sell them at a higher price as a way of earning revenue. That’s why historical cost is the appropriate way to value most of Treehouse’s assets. You can reduce accounts payable by paying off current obligations to service providers or suppliers. AP represents these yet unpaid assets, so once the company pays, you can put money in the AP account and increase the cash side for the same amount. You can record an accounts payable entry by adding a credit to the AP and then debiting the expense or asset account.

• Identify campus-wide indirect costs to be included in billing rates .
• “Scott Company was organized on January 1, 2007, by 3 friends.
• Examples of situations, which may require an RFP, are purchases of specialized research, custom computer equipment, custom software, custodial services, marketing services, food services, and security services.
• Check is a business check issued by an awarding scholarship organization made payable to a USNH student.
• These are assets, less their related liabilities, that, by mandate of the donor, may not be spent.
• One-time service where the vendor is not an independent contractor whether on or off campus, provided performance will last for 2 days or less, or the vendor requires payment via credit card.

Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She issues additional common stock for $1,000. An adjusting journal entry occurs at the end of a reporting period to record any unrecognized income or expenses for the period. Short-term debt is typically the total of debt payments owed within the next year. The amount of short-term debt as compared to long-term debt is important when analyzing a company’s financial health. For example, let’s say that two companies in the same industry might have the same amount of total debt.

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“Compare the traditional, parent-company, and entity theories of consolidated financial statements. Rockwell Corporation had a net income of $150,000 for the year ending 2009. The company decided to payout 40% of earnings per share as a dividend. Rockwell has 120,000 shares issued and outstanding. “Creat a business sooner purchased office supplies on account. the transaction would be recorded as: process level REA model for Quandrax Computers’ acquisition/payment process. Be sure to include all relevent entities,relationships,attributes,and participation cardinalities. “Each share of preferred stock is convertible into one share of common stock, and each bond is convertible into 25 shares of common stock.

Proper card acceptance begins and ends with sales staff and is critical to customer satisfaction and profitability. If your unit will be processing both Card-Present (in-store) and Card-Not-Present transactions, it is important to learn the steps needed to prevent fraud in both situations. https://business-accounting.net/ Use appropriate facility entry controls to limit and monitor physical access to systems that store, process, or transmit cardholder data. Provide all third party vendors with the University’s credit card procedures. Ensure that all transmissions of sensitive credit card data are encrypted.

Examples of Accrued Expenses

Discrepancies in the balance of fixed assets may result from a physical fixed asset count. Set a proper cutoff for recording fixed asset purchases. Small businesses may not have enough staffing to attain the separation of duties needed for adequate internal control. Their accounting systems may be inadequate to prevent fraud and duplicate payment errors. When properly organized and maintained, source documents will provide you with a paper trail for all of your transactions and serve as records in case of an audit or a need to prove business compliance. Retaining all source documents allows you to accurately ensure that your books are up to date.

• You need real-time dashboards with your company’s KPIs , including trend analysis that all functional areas with authorization privileges can access.
• It will be these individuals’ responsibility to ensure the prudent management of these funds, in accordance with all USNH policies and procedures.
• “Marlow Company uses a perpetual inventory system.
• Specifically, GAAP for governments requires that for a revenue to be recognized in the current fiscal period is must be measurable and available.
• The Swaption purchaser has the right to enter a specific Swap for a defined period of time.
• Obtain the approval (i.e. signature) of the change fund custodian’s supervisor, or other designated department or division official.
• The standard cost per unit of product is shown below.

Forgetting to notify the Accounting Office of a change in petty cash fund custodian. A check will be issued, payable to the fund custodian.