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This meant that students, more likely those from low-income
families, that needed assistance would fail their qualifying exams
if they did not have access to free or low-cost after-school
tutoring sessions. That said, public organizations do encounter a
few typical transactions that account for many of their expenses. First, and most important, when Treehouse pays its staff it
recognizes an expense for salaries. Here Treehouse has swapped a liquid asset (cash)
for a less liquid asset (equipment).
Transactional analysis integrates the theories of psychology and psychotherapy because it has elements of psychoanalytic, humanist https://www.bookstime.com/articles/accounting-transaction-analysis and cognitive ideas. Berne identified a typology of common counterproductive social interactions, identifying these as « games ».
Ego-State Therapy: An Overview
The account payable,
however, is a current liability because Treehouse can expect to pay
it off within the fiscal year. This transaction adds to both sides
of the fundamental equation, and the net effect on the equation is
zero. In second step, the nature of accounts identified and extracted in first step is determined. For example, in above transaction of Robert Traders, cash account is an asset account by nature and capital account is an equity account by nature. In simple words, we can say that the cash account is classified as an asset account and Robert’s capital account is classified as an equity account.
Some of it might happen if the
asset bears a particularly heavy workload. Some capital items might
be largely out of use, but they will lose value because each year
that goes by, they’ll become harder for Treehouse to sell should
they choose to liquidate them. Public organizations can also borrow money using
bonds, notes payable,mortgages, or lines of
credit.
For Governments – Recognition Concepts for Modified Accrual
Specifically, GAAP for governments requires that for a revenue to
be recognized in the current fiscal period is must be
measurable and available. In the absence of a detailed way to measure that
wear and tear, accountants typically deal with depreciation through
simplifying assumptions. One of the most common is to use
straight-line depreciation also known as the
straight-line method. Under the straight line method, when
an organization purchases a new capital asset it determines the
length of time it can use that asset to deliver services.
