Bookkeeping

Dealership financing means you’re applying for financing through the dealership. You and the dealer enter into a contract where you buy a car and agree to pay, over a period of time, the amount financed plus a finance charge. The dealer typically sells the contract to a bank, finance company, or credit union that will … Leer más

Banks that issue standby letters of credit or similar obligations carry contingent liabilities. All creditors, not just banks, carry contingent liabilities equal to the amount of receivables on their books. Similarly, the guidance in ASC 460 on accounting for guarantee liabilities, which has existed for why the quick ratio is important two decades, is often … Leer más

Assume in Example 1 that you borrowed the money on March 1 and immediately bought the stock for $8,000. You had no other transactions on the bank account until June. You did not sell the stock, and you made no principal payments on the debt. The $8,000 is treated as being used for an investment … Leer más

However, some bank and credit union accounts allow you to make overdrafts, and so do some prepaid cards. Overdrafts allow you to overspend, and then you must replace the money. Plus, you have to pay an overdraft fee for each transaction that overdraws your account. Double-entry accounting helps ensure the accuracy and integrity of financial … Leer más