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If a firm sells more than it purchases
Company B, Italian, pays Company A, Italian, in advance for the purchase of Product X.
The advance payment is worth 50,000 Euro.
The cost of the purchased Product X, at the moment of the delivery, is 50,000 Euro.
The Input VAT (20% rate) for the Company B:
On the maturity date the company pays the installment. Which of the following T accounts will be affected by the transaction?
If the total liabilities of a business decrease by 5000 euro what will be the effect on total asset? (assuming the amount of equity remain the same)
The company's own contribution for employees' welfare involves the following accounts:
The chart of accounts is:
The adjusted trial balance:
When a company pays in advance there is no economic flow, therefore we have no impact of this business transaction in the income statement.
The note of a loan should state the following conditions to repay the money to the bank:
- the amount borrowed
- the interest rate applied and whether it is fixed or floating