Sir, your every video is very useful. I have a question about the account payables for the equipment and supplies purchased. We made closing entries of the revenue and expenditure, but are we going to carry on the payables on the balance sheet because those are the liabilities to pay in the future?
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Why when closing the entries do we debit revenues and credit funds, why don't we debit revenues and credit expenses as we adhere to in a regular company, I don't really understand this fund account and it's purpose. (And when closing the fund balance why is it a credit)
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Are you sure you're right about Debitting Supplies expenditures for 20 and credditing AP for 20? Shouldn't it be a DR to Unassigned and CR to Committed?
@@AccountingLectures I believe you, but I ask because three of my CPA exam materials I'm using (Becker, Gleim, and NinjaCPA) all have this scenario as a debit to "Unassigned fund balance" and a credit to "Fund balance, committed" for outstanding purchase orders. They do have the DR to Budget control (reserve for encumbrances) and CR to Encumbrances to close out like you showed.
You are the best! Thank you so much for your help
Most welcome. Please take a look at my website: farhatlectures.com/ then choose your course.
Are any of your supplemental courses a good addition to Ninja? I don't like Ninja's videos, but I'm using it by itself to study for CPA.
Thank you and please visit the website for more farhatlectures.com/ Start your free trial!
Thanks Farhar.
I realized the example given that the expenditure/spending is over appropriate/limit. How does it impact in real world?
HI Tri, cold you please expand or rephrase your question.
Sir, your every video is very useful. I have a question about the account payables for the equipment and supplies purchased. We made closing entries of the revenue and expenditure, but are we going to carry on the payables on the balance sheet because those are the liabilities to pay in the future?
Really great example..
Hi Mitesh,
You are welcome.Please subscribe to the channel and share with your friends, like my Facebook page and
connect with me on LinkedIn to stay updated:
Facebook: facebook.com/accountinglectures/
LinkedIn: www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-2453423a/
Website: www.farhatlectures.com
In the textbook that I use to study for FAR, they use the term Budgetary Control instead of Reserve for Encumbrance. Are they the same?
Yes, they are the same..both Equity account
Are you still working on FAR right now?
Why when closing the entries do we debit revenues and credit funds, why don't we debit revenues and credit expenses as we adhere to in a regular company, I don't really understand this fund account and it's purpose. (And when closing the fund balance why is it a credit)
Those are budgetary accounts. Yes, you don't understand it. I suggest you check my governmental course:
✔farhatlectures.com/
Is reserved for encumbrances the same as encumbrances outstanding?
No.you are welcome. Please subscribe and share the website on your social media and connect with me on Facebook and LinkedIn:
website: www.farhatlectures.com
Facebook: facebook.com/accountinglectures/
LinkedIn: www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-245342
Are you sure you're right about Debitting Supplies expenditures for 20 and credditing AP for 20? Shouldn't it be a DR to Unassigned and CR to Committed?
@9:11
yes.
@@AccountingLectures I believe you, but I ask because three of my CPA exam materials I'm using (Becker, Gleim, and NinjaCPA) all have this scenario as a debit to "Unassigned fund balance" and a credit to "Fund balance, committed" for outstanding purchase orders.
They do have the DR to Budget control (reserve for encumbrances) and CR to Encumbrances to close out like you showed.