Thursday, November 5, 2009

Keypad mouse




Meet this keypad mouse ($19.99). The 19 Key USB Numeric Keypad and Optical Mouse offers desktop and notebook users an instant benefit of a full-sized, external numeric keypad in a compact form. It functions as a numeric keypad and as an optical mouse it features a wide flip top transparent cover for the keypad and additional scroll wheel for easy web navigation. It is innovative and portable, definitely designed for
mobile professionals.

How do you treat voided checks on the bank reconciliation?

If a voided check was written in a previous month, remove the voided check from the list of outstanding checks and write a journal entry to debit Cash and credit the account(s) that was debited when the check was originally recorded.

This entry restores the cash into the checking account and eliminates the debit entered at the time the check was recorded. If the check was written in the current month, you can simply write the journal entry I just described.

Some software will allow a person to go into a previous period’s activity (as well as the current period’s activity) and process the voided check transaction and posting. This too will increase the cash balance and will reverse the debit from the account originally debited when the check was recorded.

What entry is made when selling a fixed asset?

What entry is made when selling a fixed asset?

When a fixed asset or plant asset is sold, the asset’s depreciation expense must be recorded up to the date of the sale.
1) the asset’s cost and accumulated depreciation is removed,
2) the amount received is recorded
3) any difference is reported as a gain or loss.

Here’s an example. A company sells one of its machines on January 31 for $5,000. The last time depreciation was recorded was on December 31. Depreciation expense is $400 per month. The general ledger shows the machine’s cost was $50,000 and its accumulated depreciation at December 31 was $40,000.

On January 31 the company will debit Depreciation Expense for $400 and will credit Accumulated Depreciation for $400 in order to record the depreciation during January. In its next entry on January 31, the company will debit Cash for $5,000 (the amount received); debit Accumulated Depreciation for $40,400 (the balance at January 31); debit Loss of Disposal of Asset $4,600; and credit Machines for $50,000.

Let’s step back and review the disposal of the machine. As of January 31, the machine’s book value is $9,600 (cost of $50,000 minus its accumulated depreciation of $40,400). Because the asset is sold, the $9,600 of book value or carrying value is removed from the accounts. In its place, the company received and records the cash of $5,000.

Since the company received $4,600 less than the amount it removed, it will report a loss of $4,600.

If the company had received more cash than the asset’s book value, it would report the difference as a credit to Gain on Disposal of Asset.

How do I compute the product cost per unit?

How do I compute the product cost per unit?

In accounting, we define the product cost as the direct material, direct labor, and manufacturing overhead. Costs such as advertising, preparing invoices, delivery expense, office salaries, office rent and utilities, and interest on loans are examples of expenses that are not considered to be product costs. Rather, these costs are expensed immediately to the period instead of being assigned to a product.

To be profitable, a company must have its selling prices large enough to cover both the product costs of the units sold and the period expenses.

The product cost is used for valuing the inventory and for determining the cost of goods sold. Since some of the manufacturing overhead costs are fixed in total (factory rent, factory depreciation, factory managers’ salaries), the per unit cost of a product will depend upon the number of units manufactured during a given year. In other words, the cost of a product is not know with precision, even though accountants will compute the per unit cost to the nearest penny.

Tuesday, November 3, 2009

Chart Of Account

Why the need for an effective Chart of Accounts in the System ?

•It is the heart of the system into which all modules and interfaces flow.

A chart of account is a listing of the names of the account that a company has identified and made available for recording transactions in its general ledger. A company has the flexibility to tailor its chart of accounts to best suit its needs, including adding accounts as needed.

Within the categories of operating revenues and operating expenses, accounts might be further organized by business function (such as producing, selling, administrative, financing) and/or by company divisions, product lines, etc.

A company's organization structure can serve as the outline for its accounting chart of accounts. For example, if a company divides its business into ten departments (production, marketing, human resources, etc.), each department will likely be accountable for its own expenses (salaries, supplies, phone, etc.). Each department will have its own phone expense account, its own salaries expense, etc.

Sample Chart of Accounts For a Large Corporation

Industry Considerations

•Manufacturing/Services
XX XXX XXXX XXX XXX XXX
Company Cost Centre Account Product Product Line Sub Account

•Distribution (News)
XX XXXXXX XX XXX XXXX
Division Account Region Story Distribution

•Projects
XXX XXXXX XXX XXXX XX
Company Account Department Project Project Type