Accounting

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According to Reference.com, a legal payment agreement letter must contain the date of the transaction as well as the details of the repayment agreement and any penalties incurred if the borrower defaults on the agreement. Both the payee and borrower must sign the letter, thereby creating a legally binding document.

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  • What is an accounts payable aging report?

    Q: What is an accounts payable aging report?

    A: An accounts payable aging report is an accounting detail that lists the due dates of payments that a company owes to vendors. It helps a company plan how it will use available cash by revealing which invoices have been outstanding for the longest time.
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  • What is owner's capital?

    Q: What is owner's capital?

    A: In business, owner's capital, or owner's equity, refers to money that owners have invested into the business. In some instances, individuals prefer to finance activities through capital, rather than loans, to avoid facing any financial interest charges.When activities are financed through capital in a business, the profits must be paid to the owners.
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  • What does "accretion" mean in accounting?

    Q: What does "accretion" mean in accounting?

    A: In accounting, the word "accretion" refers to growth in value over time. Accretion typically refers to the increase of value of a bond over time.
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  • What are typical accounting department functions?

    Q: What are typical accounting department functions?

    A: Accounting department duties vary from one firm to the next, but generally include tracking income and expenditures, attending to payrolls, reporting and setting financial controls. Accounting departments help to manage and monitor outgoing monetary expenses by making payments and lowering the price of bills to be paid. They regulate and watch income by tracking sales and processing incoming payments and ensure that all employees are paid according to salaries listed on the company payroll.
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  • What is a goods received note?

    Q: What is a goods received note?

    A: A goods received note is a receipt given to the supplier to confirm delivery or acceptance of goods by the customer. After the supplier receives this note, a payment invoice is sent to the customer.
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  • What is a trade discount?

    Q: What is a trade discount?

    A: According to the Accounting Tools website, trade discounts are provided to retailers by wholesalers for goods. The retailer can then charge the full manufacturer suggested retail price for the goods, using the discounted amount as profit.
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  • Is revenue the same as sales?

    Q: Is revenue the same as sales?

    A: According to About.com, sales can account for a part or the whole of a company's revenue. Revenue is the amount of money that a company earns from its primary activities. If a company's primary activity is sales, such as a retail corporation, then revenue is the same as sales. If a company has different revenue streams, such as sales and rental income, then sales accounts for a portion of revenue.
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  • What is a capital contribution in accounting?

    Q: What is a capital contribution in accounting?

    A: About.com explains that a capital contribution in accounting is a segment of a company's recorded equity. The amount may be contributed using cash, equipment or other fixed assets. A common way for an owner to contribute capital to a company is to buy stocks.
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  • What is the difference between accounting and bookkeeping?

    Q: What is the difference between accounting and bookkeeping?

    A: Bookkeeping involves recording basic accounting transactions such as recording invoices from suppliers, paying suppliers, processing payroll and recording cash received from customers. Bookkeeping is a subset of accounting. Accounting is usually more involved and includes activities such as creating financial statements, creating budgets and compiling tax returns.
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  • What is the prime cost formula?

    Q: What is the prime cost formula?

    A: The formula for prime cost is the sum of the direct cost of materials, the direct cost of labor and the direct cost of expenses, according to BusinessDictionary.com. The prime cost is the cost of a particular product that the manufacturer incurs apart from any business overhead expenses.
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  • What goes into a payment agreement letter?

    Q: What goes into a payment agreement letter?

    A: According to Reference.com, a legal payment agreement letter must contain the date of the transaction as well as the details of the repayment agreement and any penalties incurred if the borrower defaults on the agreement. Both the payee and borrower must sign the letter, thereby creating a legally binding document.
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  • What are sundry expenses?

    Q: What are sundry expenses?

    A: Sundry expenses are costs which may be relatively small or occur infrequently and are therefore not assigned to a specific ledger group. They are also known as miscellaneous expenses and are classified together as a group when they are presented in an accounting statement.
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  • What is the ordinary annuity formula?

    Q: What is the ordinary annuity formula?

    A: The ordinary annuity formula appears as "P = r (PV) / 1 - (1+R) - n." The formula is used to calculate the periodic payment against an annuity when the rate and payments remain the same, with the first payment exactly one period away.
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  • What is the difference between capital and revenue expenditure?

    Q: What is the difference between capital and revenue expenditure?

    A: A capital expenditure includes all costs incurred on the acquisition of a fixed asset along with subsequent expenditures that increase the asset's earning capacity, while revenue expenditure only includes costs that are aimed at maintaining fixed assets and not enhancing earning capacity. The distinction between capital expenditure and revenue expenditure is important because only capital expenditures are included in the cost of a fixed asset.
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  • What is the definition of "costing"?

    Q: What is the definition of "costing"?

    A: In accounting terms, costing refers to a system of calculating the amount of money it takes to produce goods or operate a business. Generally, costs include variables like cost of labor, cost of materials, cost of distribution and selling, taxes and administrative costs.
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  • Why is accounting called the language of business?

    Q: Why is accounting called the language of business?

    A: Accounting is the language of business because it helps people, both internal and external, to understand what is happening inside of s business. Just as language is universal to people, so is accounting in business. Regardless of where in the world a business is located, financial information is interpreted in the same way.
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  • What does retro pay mean?

    Q: What does retro pay mean?

    A: Retro pay are wages due to an employee for work already performed or services already rendered, usually in association with a pay raise that requires some sort of payroll action before taking effect.
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  • What are examples of liquid assets?

    Q: What are examples of liquid assets?

    A: Some examples of liquid assets include cash held in a safe deposit box, checking accounts, saving accounts, money market accounts, U.S. Treasury bills and some types of retirement accounts. An asset is liquid if you can quickly turn it into spendable cash without a significant penalty or loss in the underlying value.
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  • What is an imprest account?

    Q: What is an imprest account?

    A: An imprest account is one that holds a fixed amount of money and is replenished after a certain period of time. A good example of an imprest account is a petty cash system that may be replenished on a daily, weekly or monthly basis.
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  • What are net fixed assets on a balance sheet?

    Q: What are net fixed assets on a balance sheet?

    A: According to Ohio State University, net fixed assets on a balance sheet are the book value of a company's long-term assets, such as property, vehicles or equipment. The net fixed asset value is calculated by taking the gross asset value, or purchase price, and subtracting the accumulated depreciation of value.
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  • What is a 13-month salary?

    Q: What is a 13-month salary?

    A: A 13-month salary refers to a payment made to employees above their normal salary, usually equivalent to a month's salary. This type of payment is made as mandated by local law or as part of an employment contract.
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