What is the Difference Between the Direct Write-off Method and the Allowance Method?
The main difference between the Direct Write-off Method and the Allowance Method in accounting for bad debt is the timing of when bad debt expense is recorded. Under the Direct Write-off Method,...
What is the Journal Entry to Record the Sale or Disposal of an Asset?
When an asset is sold or scrapped, a journal entry is made to remove the asset and its related accumulated depreciation from the book. The asset is credited, accumulated depreciation is debited, cash...
When an asset is put in service in any month other than January (or first month of a fiscal year), a business generally takes depreciation only for the months the asset was owned. To calculate the...
What is the Adjusting Journal Entry for Depreciation and Accumulated Depreciation?
Whether a company records its depreciation monthly or yearly, an adjusting journal entry is made to adjust the balance of depreciation expense and to record the the loss of value of the asset in the...
Companies can use several different methods to calculate depreciation on Fixed Assets. The method is chosen at the time the asset is purchased and placed in service. The method generally remains the...
The Matching Principle is part of Generally Accepted Accounting Principles (GAAP). It requires that revenues and their related expenses be recorded in the same accounting period. As an example,...
