Thursday, July 29, 2010
PCAOB stands for the Public Company Accounting Oversight Board. The PCAOB is located in the USA and is a private, non-profit corporation created by the Sarbanes-Oxley Act of 2002.
Its main purpose is to oversee the auditors of public companies and ensure that they are following the correct standards. The PCAOB Board consists of five members who are appointed by the Securities and Exchange Commission on a specified basis.
The main goals of the PCAOB was to protect investors and the public interest by promoting informative, fair, and independent audit reports.
Wednesday, July 28, 2010
Tuesday, July 27, 2010
The following is an accounting example explaining the different between prepaid rent and unearned rent. Prepaid rent is a type of payment made by a tenant in advance of its due date and is an asset to the receiving company. For example, if the apartment's tenant had paid $240 in January for the entire year rent ($20 a month), it would show as of 1/31/xx $240 as prepaid rent. 240/12=20, 240-20=220.
The landlord in this situation would show $220 as unearned rent as of 1/31/xx a liability on the balance sheet, because they have received money for rent in which they have not provided service February through December, therefore the title unearned rent. This is the matching principle in accounting, primarily the major underlying principal of generally accepted accounting principles (GAAP).
Additional Accounting Examples:
Monday, July 26, 2010
Thursday, July 8, 2010
Some examples of selling costs include:
- Advertising Salaries
- Commissions of salesmen
- Showroom expenses
- Travel expenses
- Advertising Literature
- Gifts to Customers
Saturday, July 3, 2010
There are several types of Forecasts can include long, medium, or short-term forecasts. Specifically, they include:
- Sales forecasts are necessary to prepare a sales budget
- Capital expenditures forecasts are required to plan for funding for future years.
- Forecasts are developed to aid management in meeting goals and objectives.
- Product demand forecasts are used to prepare sales forecasts and detrmine the introduction of new products. These forecasts can also be used to determine if an old project should be dropped because its sales are lacking seriously.
Friday, July 2, 2010
Managers do not spend time reviewing areas that do not have much variance and will instead focus their efforts on areas that need the most work.
Popular Accounting Problems
The December 31, 2006 Balance Sheet of Business Card's Company shows Assets on the balance sheet of $35,000 and Liabilities of $23,0...
A toilet manufacturer is considering building a new production plant in a new town. It will require an initial capital investment of $12 mil...
Examples of Current Liabilities Current liabilities are only liabilities that will be paid within one year Short-term borrowings Cur...
The predetermined overhead rate used to apply overhead to finished jobs is determined before the period begins. Are any of the account...
Preferred Stock Example Problem: A yacht manufacturing company has issued perpetual preferred stock outstanding with a par value of $100 ...
A bank reconciliation is created by accountants periodically to display the differences between cash reported on a companies bank statement...
Percent of Sales Method to Calculate Debt Expense Bad debts expense is calculated as a straight percentage of the current years credit s...
Use this equation to calculate the Direct Material (DM) Purchase Budget for a manufacturing company: Amount of raw material required for p...
The following are examples of fixed costs and variable costs : Indirect labor- fixed costs could be variable under certain circumstances Ind...
A company has a bond that has a $ 1000 (face value of bond) and a contract or coupon intrest of 11.5%. The company's bond has a curren...