Accounting
Guide to Manual Journal Entries in QuickBooks for Third-Party Payroll Services (e.g., ADP)
A long-time QuickBooks user, after using ADP payroll services, finds it difficult to manually create journal entries (JE), mainly because ADP has already automatically completed payments, leaving no accounts payable to offset. This article analyzes the root cause of the issue and provides clear journal entry logic and operational recommendations.
Discussion on Accounting Treatment of Promotional Credits for Car-Sharing Companies
An employee of a car-sharing company asks whether free ride credits (not redeemable for cash) issued to new customer accounts to promote new business need to be accounted for in the balance sheet. The article analyzes the nature of these credits and points out that they may constitute deferred revenue or contract liabilities, suggesting reference to relevant accounting standards.
Current Ratio: Why Are Current Assets the Numerator?
When reviewing ratio analysis, a common question is: why is the current ratio current assets divided by current liabilities? This article starts from the concept, explaining the financial meaning and original design intent of the formula.
Discussion on Accounting Treatment of Write-off of Accounts Receivable, Bankruptcy Liquidation, and Inventory Liens
This article discusses a practical accounting case: after a customer went bankrupt, the company exercised a lien on held inventory and obtained approval for liquidation to settle a $100 accounts receivable. The focus of the issue is whether the accounts receivable should be fully written off in the prior year and the liquidation proceeds recognized as a gain in the current year, or whether, due to the availability of better information and a reasonable expectation of recovering most of the amount, the prior year's accounts receivable should be retained, with the current year's liquidation proceeds used to offset them and the excess recognized as a gain. The article analyzes the basis and uncertainties of both treatments.
Workers' Comp Dividend: Accounting Treatment in QuickBooks Online and Tax Implications
This article addresses a common question from business owners who receive an annual workers' compensation dividend. It explains the appropriate account in QuickBooks Online (typically under Other Income) and clarifies that the dividend's taxability depends on the underlying premium deduction—if premiums were deducted as business expenses, the dividend is generally taxable income.
Car Rental Accident Compensation Without Insurance: Financial Accounting Guidelines
Recently, a driver collided with a pillar while driving a rental car. After returning the vehicle, the insurance company denied the claim due to the rental nature of the vehicle, and the company paid the compensation out of pocket. This article provides professional guidance on how to classify this expense in the accounting books.
P&L Allocation and Performance Appraisal Design for Cross-Department Shared Resources
When two financially independent departments of the same company share some resources, a clear allocation mechanism needs to be established to accurately reflect the P&L and set fair KPIs and incentive goals. This article analyzes the allocation process and key considerations using examples of revenue share (Department A 60%, Department B 40%) and headcount share (Department A 70%, Department B 30%).
Discussion on Accounting Treatment of Payroll Fund Flow under US GAAP
Focusing on the business where a human resources service company processes payroll on behalf of its clients, this article analyzes the accounting treatment of the fund flow for collecting and disbursing payroll under US GAAP. Through journal entry examples, it explores whether the payroll portion should be presented in the income statement or balance sheet, and addresses the selection of liability and asset accounts.
Accounting Treatment Challenges of Cost Attribution and Profit Transfer under Consignment Processing Mode
A mainland Chinese company (A) provides raw materials free of charge to a processing factory (B), which processes them, charges a service fee, and sells the finished products back to A; simultaneously, B supplies goods to Hong Kong parent company (C), but C pays B's Hong Kong representative office (D). This arrangement results in A retaining raw material costs while C's COGS is understated, creating tax risks of profit transfer from China (tax rate 25%) to Hong Kong (tax rate 16.5%). The article raises four core questions: cost attribution, feasibility of zero-value transfer, characterization of profit transfer, and timing of ownership transfer of finished products.
How to obtain a GAAP certification that can be displayed on LinkedIn?
A job seeker with CPA study materials, looking for an entry-level accounting position, hopes to complete a course that demonstrates their understanding of GAAP and add the certification to the certifications section of LinkedIn, so that employers can easily recognize it.