Deferred Tax Liability Accounting

Deferred tax liabilities are shown as long term liabilities on the balance sheet of a business, and represent obligations to pay income tax at some point in the future arising from temporary timing differences.

Deferred Tax Liability Accounting June 2nd, 2017Team
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Accrued Income Tax

A business has an estimated annual income tax expense of 14,000 due of profits for the accounting period. A demand for the amount has not yet been received from the tax authorities, and the expense has not been recorded in the accounting records. An accrued income tax adjusting entry is made in the accounting records.

Accrued Income Tax November 6th, 2016Team
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Accrued Salaries

Accrued salaries are salaries which has been incurred but not yet recorded in the accounting ledgers at the end of the accounting period.

This accrued salaries journal entry example shows how to record an accrued expense for salaries when an employee has carried out work during an accounting period but has not been paid by the end of the accounting period.

Accrued Salaries November 6th, 2016Team
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Extended Warranty Accounting

In addition to the standard warranty, businesses often sell an extended warranty for an additional fee. Revenue from the sale of extended warranties is recognized on a straight line basis over the term of the warranty.

Extended Warranty Accounting November 6th, 2016Team
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Warranty Costs

Manufacturer warranty costs are both probable and subject to reasonable estimation and therefore create a contingent liability which a business needs to include in its financial statements.

Warranty Costs November 6th, 2016Team
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Security Deposit Liability

When a property rental business receives a cash security deposit from a tenant it needs to record this a balance sheet liability and not revenue.

Security Deposit Liability April 12th, 2017Team
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Incorporation Expenses

When an owner pays incorporation costs on behalf of a business, a journal entry is needed to record the business expense and the liability to the owner.

Incorporation Expenses November 6th, 2016Team
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Accrued Expenses

Accrued expenses are expenses which has been incurred but not yet recorded in the accounting ledgers at the end of the accounting period.

A business has an annual premises rent of 12,000 but an invoice has not been received from the landlord and the rental expense has not been recorded in the accounting records.

Accrued Expenses November 6th, 2016Team
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