Assets & Liabilities Flashcards
(17 cards)
deposits in transit
funds sent by the depositor to the bank that have not been recorded by the bank yet so will not be included in the bank statement
outstanding checks
checks written for payment by the depositor that have not been presented to the bank
NSF: non-sufficient funds
the check may not have been redeposited until the following months
steps for a simple bank recon
- book balance is adjusted to reflect any corrections made by the bank (NSF checks, charges)
- adjusted balance = true balance
- bank balance is then reconciled to equal the adjusted book balance or true balance
step 1: how to adjust book balance to true balance
add bank collections, interest income
subtract NSF checks, service charges
adjustments to bank balance
add dep in transit
deduct outstanding checks
maybe touch errors
straight line depc
cost - salvage value / estimated useful life
depreciation charged to operations
beg balance
+ depc charged to operations
- Acc depc on equipment sold
=total depreciation charged for year in operations
how to treat estimated restoration costs
add to depletable base of the natural resource
depletion amount
all total costs / estimated amount to be used
trade accounts payable - gross method
records purchase without regard to the discount - wait until its actually taken
trade accounts payable - net method
records purchases net of discounts in beginning
straight line depc
cost - salvage / estimated life
double declining balance
2 x (1/n) x (carrying value)
units of production
cost - salvage / number of units going to produce in life. then multiple by amount used this year
sum of the year digits
(n+1)/2
