What is an Inventory Purchase Journal Entry? An inventory purchase journal entry records the acquisition of goods that a business intends to sell. This entry typically involves debiting the Inventory account to increase the company’s assets, showing that inventory has been added to the stock. Concurrently, the Cash account is credited if the purchase is ... Read more
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What is a Sales Revenue Journal Entry? A sales revenue journal entry is an accounting entry recorded in the financial ledgers of a company to document the income generated from the sale of goods or services before any deductions, like returns or discounts. This entry is crucial for capturing the essence of business transactions related ... Read more
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Definition: A valuation allowance is an accounting reserve (contra account) set against deferred tax assets to ensure that their value on the balance sheet accurately reflects the amount that is more likely than not to be realized. It acts as a safeguard, adjusting the deferred tax assets to a level that can be substantiated by ... Read more
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Definition: Round-trip transactions refer to a series of transactions where a company sells an asset and then repurchases the same or similar asset, often at a similar price and within a short time frame. These transactions can artificially inflate a company’s revenue and trading volume, creating a misleading impression of its financial activity and health. ... Read more
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