Question:

Hello everyone, I am currently taking a intermediate accounting I class , and have a few questions. 1) Expense vs. Loss ex: If a company owns a plant on a river that floods every few years. During the current year it flooded causing 90,000 of uninsured damage (which has been paid). the following entry is what given as a "possibly in-correct entry" by the textbook. Dr. Retained Earnings , Flood loss  90,000 Cr. Cash                                   90,000 My question is , would the flood damage be a loss or a expense. Would the fact that floods are expected and that they are part of the operating environment meet the criteria as a expense?? 2) If a company buy back some of its shares during the year and then pays out a dividend on outstanding shares , do the shares they bought back receive dividends?? Im thinking no but the text doesnt even cover this , but it does seem wrong to me that a public company would be able to allocate dividends to shares they bought back because it would decrease the retained earnings. Sorry for such a long post , i should have mentioned this is ALL in canadian GAAP , but any help is GREATLY appreciated. Thank You.

Response:

hello everyone,  I am currently taking intermediate accounting 1 , and had a few questions about some technical stuff.  1) Expense vs. Loss     example ; A company has a warehouse near a river , the river floods every few years . This year the river flooded and cause 90,000 in uninsured damage , which is what was paid to fix the damage. The book gives us a "possible incorrect entry" :               dr. Retained Earning ,flood loss —-90,000  My question is , the fact that the river is expected to flood and it is part of the operating environment , would that be enough for it to be considered a expense?? I was thinking if this should be treated as a expense then the correct entry would be ;                           dr. Retained earnings , flood expense 90,000                           cr. Cash                                     90,000 2) If a company buys back some of its shares during the current year and then declares dividends on the outstanding shares , is it correct for the company to allocate some of the dividends to the shares it bouht back?? Im thinking no because then the company would be debiting R.Earnings with a cash outflow to itself , seems kinda shady to me , but the book doesnt cover this topic.Any opinions?        This Course is dealing with Canadian GAAP , which is suppose to be similiar to US GAAP i believe , anyway any help is greatly appreciated , Thank You. Eddie

Response:

- Hide quoted text — Show quoted text – Hello everyone, I am currently taking a intermediate accounting I class , and have a few questions. 1) Expense vs. Loss ex: If a company owns a plant on a river that floods every few years. During the current year it flooded causing 90,000 of uninsured damage (which has been paid). the following entry is what given as a "possibly in-correct entry" by the textbook. Dr. Retained Earnings , Flood loss  90,000 Cr. Cash                                   90,000 My question is , would the flood damage be a loss or a expense. Would the fact that floods are expected and that they are part of the operating environment meet the criteria as a expense??

the flood damage could be both a loss and an expense but the problem ("in-correct entry")  is the debit to retained earnings, 2) If a company buy back some of its shares during the year and then pays out a dividend on outstanding shares , do the shares they bought back receive dividends?? Im thinking no but the text doesnt even cover this , but it does seem wrong to me that a public company would be able to allocate dividends to shares they bought back because it would decrease the retained earnings.

your thinking is correct

Response:

– Hide quoted text — Show quoted text – hello everyone,  I am currently taking intermediate accounting 1 , and had a few questions about some technical stuff.  1) Expense vs. Loss     example ; A company has a warehouse near a river , the river floods every few years . This year the river flooded and cause 90,000 in uninsured damage , which is what was paid to fix the damage. The book gives us a "possible incorrect entry" :               dr. Retained Earning ,flood loss —-90,000  My question is , the fact that the river is expected to flood and it is part of the operating environment , would that be enough for it to be considered a expense?? I was thinking if this should be treated as a expense then the correct entry would be ;                           dr. Retained earnings , flood expense 90,000                           cr. Cash 90,000

you thinking may be off,  the debit to retained earnings is wrong

Response:

True enough. However, at $90K USD per incident (say every 3 years) I would seriously evaluate the cost benefit of staying versus moving…

– Hide quoted text — Show quoted text – Hurricane Hazel is a completely different thing than the Don River or the Humber or Rouge flooding regularly… It was just a thought. Since flooding never happens in Toronto, Canada and I know auditors who would scratch their heads at experiencing tens of thousands of flood losses every few years. Not so quick with the "never".  :) http://tinyurl.com/3puyu I was responding to your phrase "flooding never happens in Toronto" and not the "flooding regularly". In any case, I don’t mean to be argumentative. Perhaps the loss occurred by a flood every few years is much less than the cost of a one time plant move or rebuilding somewhere else. Who knows, this item (rebuilding somewhere else) may be in their long term plans.

Response:

It was just a thought. Since flooding never happens in Toronto, Canada and I know auditors who would scratch their heads at experiencing tens of thousands of flood losses every few years.

Not so quick with the "never".  :) http://tinyurl.com/3puyu

Response:

- Hide quoted text — Show quoted text – Hurricane Hazel is a completely different thing than the Don River or the Humber or Rouge flooding regularly… It was just a thought. Since flooding never happens in Toronto, Canada and I know auditors who would scratch their heads at experiencing tens of thousands of flood losses every few years. Not so quick with the "never".  :) http://tinyurl.com/3puyu

I was responding to your phrase "flooding never happens in Toronto" and not the "flooding regularly". In any case, I don’t mean to be argumentative. Perhaps the loss occurred by a flood every few years is much less than the cost of a one time plant move or rebuilding somewhere else. Who knows, this item (rebuilding somewhere else) may be in their long term plans.

Response:

Hurricane Hazel is a completely different thing than the Don River or the Humber or Rouge flooding regularly…

– Hide quoted text — Show quoted text – It was just a thought. Since flooding never happens in Toronto, Canada and I know auditors who would scratch their heads at experiencing tens of thousands of flood losses every few years. Not so quick with the "never".  :) http://tinyurl.com/3puyu

Response:

Thanks to everyone for the help , I am familiar with "extra-ordinary" events but we as a class have not yet covered this subject (it is part of the next chapter) . Thanks to those you pointed out that Debiting the RE was incorrect i had originally thought that with "Loss" was also debited from RE , such as a expense , but i take it im wrong right? , from reading the responses im beggining to think that they consider the flood damage a loss and that the mistake is in the debiting of the RE , just out of curiosty if it were a loss , what would be the journal entry ? Cash would be credited but what would the debit be?? Thanks again.

Response:

It was just a thought. Since flooding never happens in Toronto, Canada and I know auditors who would scratch their heads at experiencing tens of thousands of flood losses every few years. — Stephanie Serba, AICIA Partner, Durham Business Outsource Accounting & Technology smserba <at dbo <dot ca www.dbo.ca

– Hide quoted text — Show quoted text – The correct entry would be to an Extraordinary Expense, Flood Loss and would be stated in the income statement as such. Personally, I’d recommend they MOVE. Might be hard to explain to the CCRA or the IRS why they stay somewhere that means losses of this nature every 3 to 4 years… It should be pointed out though there are people in California who got flooded recently, they were previously never in a flood area, the area was previously desert. Moving may not necessarily be an option.   For example the entire state of Indiana is flooded right now. —-== Posted via Newsfeeds.Com – Unlimited-Uncensored-Secure Usenet News==—- http://www.newsfeeds.com The #1 Newsgroup Service in the World! 100,000 Newsgroups —= East/West-Coast Server Farms – Total Privacy via Encryption =—

Response:

– Hide quoted text — Show quoted text – Hello everyone, I am currently taking a intermediate accounting I class , and have a few questions. 1) Expense vs. Loss ex: If a company owns a plant on a river that floods every few years. During the current year it flooded causing 90,000 of uninsured damage (which has been paid). the following entry is what given as a "possibly in-correct entry" by the textbook. Dr. Retained Earnings , Flood loss  90,000 Cr. Cash                                   90,000 My question is , would the flood damage be a loss or a expense. Would the fact that floods are expected and that they are part of the operating environment meet the criteria as a expense?? the flood damage could be both a loss and an expense but the problem ("in-correct entry")  is the debit to retained earnings,

The correct entry would be to an Extraordinary Expense, Flood Loss and would be stated in the income statement as such. Personally, I’d recommend they MOVE. Might be hard to explain to the CCRA or the IRS why they stay somewhere that means losses of this nature every 3 to 4 years… 2) If a company buy back some of its shares during the year and then pays out a dividend on outstanding shares , do the shares they bought back receive dividends?? Im thinking no but the text doesnt even cover this , but it does seem wrong to me that a public company would be able to allocate dividends to shares they bought back because it would decrease the retained earnings. your thinking is correct

Dividends are paid to owners of outstanding shares, not unissued or TREASURY stock. Shares which were owned by stockholders and bought back by the issuing company are TREASURY shares. They are otherwise treated the same as unissued stock. — Stephanie Serba, AICIA Partner, Durham Business Outsource Accounting & Technology smserba <at dbo <dot ca www.dbo.ca

Response:

The correct entry would be to an Extraordinary Expense, Flood Loss and would be stated in the income statement as such. Personally, I’d recommend they MOVE. Might be hard to explain to the CCRA or the IRS why they stay somewhere that means losses of this nature every 3 to 4 years…

It should be pointed out though there are people in California who got flooded recently, they were previously never in a flood area, the area was previously desert.   Moving may not necessarily be an option.   For example the entire state of Indiana is flooded right now.   —-== Posted via Newsfeeds.Com – Unlimited-Uncensored-Secure Usenet News==—- http://www.newsfeeds.com The #1 Newsgroup Service in the World! 100,000 Newsgroups —= East/West-Coast Server Farms – Total Privacy via Encryption =—

Response:

Question:

 Crimes

http://www.homestead.com/prosites-prs/files/bodysmall1.jpg http://www.homestead.com/prosites-prs/files/bodysmall2.jpg — * See the REAL ‘Religion of Peace’, Islam, on this site – EXCELLENT * http://www.mathematik.net/homepage/islam/islam.htm * Translated:  http://tinyurl.com/2ooqh

Response:

Exposure of Zionist Crimes PALESTINE REFUGEE RIGHTS GROUP DEMANDS FULL EXPOSURE OF ZIONIST CRIMES AGAINST HUMANITY CALLS TORTURE OF PALESTINIAN CIVILIANS UNDER ZIONIST OCCUPATION A TEMPLATE FOR US AGGRESSION AGAINST IRAQ Decades of torture, humiliation and physical abuse endured by the people of Palestine under Zionist occupation have served as a template for the tragedy the US has created in Iraq and all of the Arab world . In addition, land theft, home demolitions and the depletion of the Palestinian social structure defies every tenet of international humanitarian law. Al-Awda, The Palestine Right of Return Coalition joins the Arab peoples in the world-wide condemnation of the United States occupation of the sovereign nation of Iraq, which flaunts all international rules of law. We also condemn the use of mercenaries in Iraq ("sub-contractors") in its attempts to privatize war in an effort to remove it from the glare of public scrutiny. US actions in Iraq are now being held up to a mirror for all the world to see. We demand no less for the people of Palestine: A full accounting of the crimes against humanity perpetrated upon the Palestinian people since the imposition of the Zionist state, to be overseen by The International Criminal Court. That the United States be held accountable to all international laws regarding its complicity in the maintenance of the years long Zionist occupation of Palestine. Along with calls for holding responsible all aggressors involved in the preemptive and illegal war against the people of Iraq, we demand the same hold true for all parties responsible for the condition of the Palestinian people, based on laws governing the Geneva conventions prohibiting the use of torture, cruelty and other forms of mistreatment. In addition, the distortion and outright defiance of all UN resolutions regarding the inalienable right of the Palestinian people to return to their homes and lands (since 1947 until today) must be seriously addressed by international bodies. While what continues to be a humanitarian disaster of epic proportion for the Palestinian people, it must be understood that the war against Iraq has its roots in the imposition of the Jewish Only state in the Middle East, since 1947. Only when the Palestinian refugees return to the homes and land they were uprooted from, can stability return to the region. Al-Awda, The Palestine Right to Return Coalition is one of the largest networks of grassroots activists dedicated to Palestinian human rights. Our website may be viewed at http://al-awda.org

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Question:

- Hide quoted text — Show quoted text – Don’t bother with taxation.  Unless you want to make partner in a Big Four Firm, you will be one of the most underpaid and overworked people in the US, taking into consideration the amount of knowledge you will have to master to be effective in your position. I work for a small firm in Dallas.  I worked 70 hours a week during busy season (8 week period from mid-February through mid-April and I’m expected to work 50 for the rest of the year.  For $59k.  That’s a minimum of 2,760 hours a year, or about $21/hour.  Imported computer programmers from India with a 1 year computer education make more than me.  And I’m told I’m overpaid at least twice a year during reviews. I bill 3 times my COST, not salary, but COST to the firm.  I have 4 years of experience, a CPA license, and a Masters in Taxation.  It’s utter BS.  Don’t do it.  Unless you can do consulting only, I would strongly urge you to not get into tax accounting at all.  It blows.

All of this is basically true except you do get valuable experience and if you really like taxation (who doesn’t !)  it can lead to jobs outside public accounting.

Response:

Hi, I’m a recent b.comm graduate starting work in audit at a Big Four firm in September.  I’m currently taking advanced taxation and am enjoying it very much.  In fact I enjoy it a lot more than the audit classes that I have taken.  This has really spured my interest in tax, and now I feel like I would really enjoy a career in tax accounting. My current plan is to put in my audit hours at my firm and then maybe try and do a part time masters in tax and move into the taxation area.  I’d really appreciate any thoughts/comments from any tax professionals. Thanks! Brendan

Response:

Don’t bother with taxation.  Unless you want to make partner in a Big Four Firm, you will be one of the most underpaid and overworked people in the US, taking into consideration the amount of knowledge you will have to master to be effective in your position. I work for a small firm in Dallas.  I worked 70 hours a week during busy season (8 week period from mid-February through mid-April and I’m expected to work 50 for the rest of the year.  For $59k.  That’s a minimum of 2,760 hours a year, or about $21/hour.  Imported computer programmers from India with a 1 year computer education make more than me.  And I’m told I’m overpaid at least twice a year during reviews. I bill 3 times my COST, not salary, but COST to the firm.  I have 4 years of experience, a CPA license, and a Masters in Taxation.  It’s utter BS.  Don’t do it.  Unless you can do consulting only, I would strongly urge you to not get into tax accounting at all.  It blows.

Response:

Question:

I think you need to wake up. If nuclear arms are ever used, everything is over.

That is nonsense.  Nukes will be used, with some regularity in the coming decades. Life will go on.  Oh, it will not be pretty. It will be completely unnecessary, mindless stupidity.  But it will happen.  The Pakistanis and Indians almost did it a couple months ago.  The Chinese and Russian leaders went in there an read them the riot act, I think.  So until today at least, they have not traded any nukes. There will be mutations.  There will be increase in the background radiation.  Oh, in a few centuries, perhaps we will be in real trouble, because of all this. But who the heck cares about more than their own children and grandchildren?  Beyond that, very few people care. The Israelis are the other lunatics of the planet, building settlements and carrying on like there was no necessity for compromise.  Such policy is only backed up by their military option, of which conventional power would run out pretty quickly without either US assistance or their own nuclear threat. TOdd

Response:

This thread does not appear to be on topic. How about transferring it to another newsgroup devoted to political issues without direct accounting relevance? A. Lucien Meyers, CIA, CMA — If you receive this by error, please delete it and inform the sender. PGP Key fingerprint=F1C0 D9AE 1B18 1405 4DFA  B4CC 6DC7 FF78 C76E FB15 To Big Brother Echelon from "spook": KGB Nazi plutonium Albanian Ft. Bragg anthrax Mossad strategic NORAD DES

Response:

It is not unlikely that one or more nuclear weapons are already loose, in the United States.  We need to begin thinking about how to react, intelligently, when everybody is being swept up into a mass hysteria by such a blast. First of all, when the blast occurs there will probably be very little hard evidence who caused it.  The perpetrators would almost need to provide the evidence intentionally, to prove a point. Regardless of whoever the perpetrators are, I expect there would be a huge emotional backlash against some particular country or ethnic group. Americans will not want to accept such huge, unprecedented losses and damage.  They will not accept they’re vulnerable to war losses, since they have, basically, never lost a war.   Falling back on everything we know, our instincts, our gut, we will turn furiously to our industrial power, our factories, to build weapons on a scale never seen before.  Our geographical location, 5000 miiles from the nearest threats, makes us safe from the missiles of our enemies.  With impunity we will build weapons in our invincible factories. The majority of Americans will want blood vengeance against some physical, geographically located place associated with whoever they think is responsible for the blast.  Then, there will be a huge expenditure of money into the coffers of the arms industry and the pentagon, and another vicious bombing campaign that causes another cycle of even-more dedicated terrorists. The danger in these scenarios is that the profits of the energy industry and arms industries are so great, and their influence over foreign policy is also so great, as to create a moral hazard.  They will instigate wars because the profits are so great.  (You’ll notice however, Boeing has moved office, to Chicago, away from the factories…) Over time we have seen Darwinism in the US aerospace, technology and energy industries. Those firms who do NOT sell to the government, as the decades go by, sooner or later have gone out of business. In the long run there are fewer Fortune 100 industrial, financial or technology companies remaining, that are not actively integrated into Washington policymaking and sharing in its revenues and favors. All of this has had some usefulness for Americans, in the past. We did win a lot of wars with this system.   But in a world of nuclear and biological proliferation, making peace is a lot smarter strategy.  It was smarter before September 11, it’s smarter today, and it will *still* be the smartest strategy even after the nuclear terrorism begins. Todd

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Question:

How a Bright Star at Andersen Burned Out Along With Enron By ANITA RAGHAVAN Staff Reporter of THE WALL STREET JOURNAL HOUSTON — For most of his life, David Duncan played by the rules. He graduated from high school with honors after losing his father at 18. Joining Arthur Andersen LLP out of Texas A&M University, he rose to become one of its youngest partners. So valued was his work that he was feted before 2,000 of his fellows at the firm’s annual partners’ meeting in New Orleans last October. He was earning more than $1 million a year by last January, when Andersen abruptly fired him for destroying documents related to the audit of Enron Corp. Mr. Duncan’s friends now struggle to understand the events that led to his pleading guilty last month to obstruction of justice. They know him as a family man, who arrives like clockwork each Sunday for the 8:25 a.m. service at his local church, always sitting in the same pew. <snip There is "no question David Duncan was a client pleaser," Andersen lawyer Rusty Hardin told jurors in the current federal trial against the accounting firm. <snip After Enron collapsed, says Mr. Duncan’s pastor, Mr. Jackson, the accountant spoke about the pressure Enron had put on him. "He basically said it was unrelenting," Mr. Jackson says. "It was a constant fight. Wherever he drew that line, Enron pushed that line — he was under constant pressure from year to year to push that line." http://online.wsj.com/article/0,,SB1021425497254672480-search,00.html… (subscription only) This story is a must read for anyone trying to understand what happened here.  For anyone seriously interested in accounting, this story alone is worth the annual subscription cost of the online journal. Otherwise, I’m sure the story will be soon be picked up by the press at large. — Jim Hudspeth, CFE, CPA   http://survivalworks.com

Response:

- Hide quoted text — Show quoted text – He graduated from high school with honors after losing his father at 18. Joining Arthur Andersen LLP out of Texas A&M University, he rose to become one of its youngest partners. So valued was his work that he was feted before 2,000 of his fellows at the firm’s annual partners’ <snip There is "no question David Duncan was a client pleaser," Andersen lawyer Rusty Hardin told jurors… <snip Duncan’s pastor, Mr. Jackson, the accountant spoke about the pressure Enron had put on him ..said it was unrelenting," Ok, he was so popular with clients that he was worth a cool million a year, and he didn’t like the pressure being put on him.

Next, he will start complaining about sexual abuse. There has been a systematic problem of auditor abuse, for many years, that could be bigger than the scandal with the Catholic church.  Instead of priests, cornholing those altar boys we have those porky oil executives, and their unrelenting pressures… Todd

Response:

<snip – Hide quoted text — Show quoted text – He graduated from high school with honors after losing his father at 18. Joining Arthur Andersen LLP out of Texas A&M University, he rose to become one of its youngest partners. So valued was his work that he was feted before 2,000 of his fellows at the firm’s annual partners’ meeting in New Orleans last October. He was earning more than $1 million a year by last January, when Andersen abruptly fired him for destroying documents related to the audit of Enron Corp. <snip There is "no question David Duncan was a client pleaser," Andersen lawyer Rusty Hardin told jurors in the current federal trial against the accounting firm. <snip After Enron collapsed, says Mr. Duncan’s pastor, Mr. Jackson, the accountant spoke about the pressure Enron had put on him. "He basically said it was unrelenting," Mr. Jackson says. "It was a constant fight. Wherever he drew that line, Enron pushed that line — he was under constant pressure from year to year to push that line."

Ok, he was so popular with clients that he was worth a cool million a year, and he didn’t like the pressure being put on him. Did it not occur to him to leverage that popularity into a move to an honest company? Sounds like he could have moved into the CFO or CEO chair at lots of firms. I guess his conscience wasn’t really bothering him all that much. Irv

Response:

Perceptive.   Most folks are so immersed in the daily vomit of "personal tragedies" they no longer see what is really going on.

… It’s because emotional stories like this, similar to the novel Prozac Nation, that accounting is going downhill.  For a profession which has as it’s main selling point integrity, giving sob stories about how the pressure was too great and he had to give in makes it seem like just another snowjob..and that the elusive quality of integrity is ancillary. Let’s try rewriting this with "drug dealer" instead of "accountant".

… — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for six years, mistake of being an accountant.  * *   Students, when someone tells you of your great future as  * *       an accountant, ask him to show you the job.           *

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Question:

Thank you for your time and advice. Apology for my delayed reply. I was very busy, because of the end of the financial year. I had not even had time to check my email. On Monday I will start reconciling your model with my practical requirements. Thanks again, Nikolai

– Hide quoted text — Show quoted text -Hi in NSW Questions: Are the "Trust Accounts" legal trust accounts, required by law. If so is there a separate bank account for each customer or is a "general" trust used. If the accounts are required by law there should be some policy by the Real Estate Authority stipulating the use and practice of the accounts. I will assume that the funds must go to a legal trust.  (So the funds never belong to the real estate agency) Funds from tenant to trust at start of month. Funds from trust (less service fees) to landlord. My interpretation of entries: Rent from tenant:  July 1 2001 The cheque from the tenant is $850                                              Debit      Credit Trust account                          $850        Landlord Payable                          $850 Pay Rent to Landlord: July 30 2001 The REA fee is 10% ($85) per Mo and the REA paid $65 for repairs. Pay the Landlord and the REA from trust.                                              Debit      Credit Co. Bank  (cheque)                $150 Landlord Payable(cheque)      $700        Trust Account                                 $850 (at this point we have paid the landlord and REA)                                              Debit      Credit Landlord payable                    $150         Revenue                                        $85 (10% fee)         Costs recovered                            $65 Note the other entry for repairs:                                              Debit      Credit Co. Bank                                               $65 Flow Free plumbing                  $65 If this scenario is correct then we need to try to adapt the AccProggy to make it work. Hint: Do the accounting and then fit it to the proggy  Recently I started working as a stand-alone accountant in a newly established real estate agency. Previously I worked in retail business, and in the new place I faced a problem:  HOW TO DEAL WITH TRUST ACCOUNTS.  For accounting I use MYOB and for this reason I searched for the solution in "Making the Most of MYOB", "Computer Accounting Using MYOB", MYOB manual and the Internet Support Notes for MYOB. Unfortunately, my effort gave no result. Than I searched dozens of accounting books in a library and again failed to find anything. And finally I talked to a practicing accounting specialist.  In the end of the day, it looks like this newsgroup is my last resort. Could anybody kindly advise me:    1.. What should be a contra account of the trust account?    2.. Who deposits money to trust account: customer or vendor (using MYOB terminology), debtor or creditor?    3.. What would be a transaction of deducting the company’s commission from the trust account? How to allocate it to the company’s general cheque account and income account?    4.. What would be transaction of deducting expenses from the amount originally allocated to the trust account?    5.. What would be a transaction of transferring money from the trust account to an account of those who have to receive the funds?  A real life situation looks like this:  A proprietor (Ms X) hires a real estate agency (REA) to arrange rent of a house. In the beginning of a month a person who rents the house (Mr Y) pays monthly rent which is being allocated to the trust account of REA. In the end of the month, the REA transfers rent from the trust account to Ms X’s account less commission and expenses incurred while looking after the property (plumber, repairs, etc).  Thank you for your consideration and advise.  Kind regards  Nikolai

Response:

  Recently I started working as a stand-alone accountant in a newly established real estate agency. Previously I worked in retail business, and in the new place I faced a problem:   HOW TO DEAL WITH TRUST ACCOUNTS.   For accounting I use MYOB and for this reason I searched for the solution in "Making the Most of MYOB", "Computer Accounting Using MYOB", MYOB manual and the Internet Support Notes for MYOB. Unfortunately, my effort gave no result. Than I searched dozens of accounting books in a library and again failed to find anything. And finally I talked to a practicing accounting specialist.   In the end of the day, it looks like this newsgroup is my last resort. Could anybody kindly advise me:     1.. What should be a contra account of the trust account?     2.. Who deposits money to trust account: customer or vendor (using MYOB terminology), debtor or creditor?     3.. What would be a transaction of deducting the company’s commission from the trust account? How to allocate it to the company’s general cheque account and income account?     4.. What would be transaction of deducting expenses from the amount originally allocated to the trust account?     5.. What would be a transaction of transferring money from the trust account to an account of those who have to receive the funds?   A real life situation looks like this:   A proprietor (Ms X) hires a real estate agency (REA) to arrange rent of a house. In the beginning of a month a person who rents the house (Mr Y) pays monthly rent which is being allocated to the trust account of REA. In the end of the month, the REA transfers rent from the trust account to Ms X’s account less commission and expenses incurred while looking after the property (plumber, repairs, etc).   Thank you for your consideration and advise.   Kind regards   Nikolai

Response:

Nikolai, See my answers following your various questions.  NOTICE – I am from Canada so the rules for Trust accounts may vary from yours in Australia. My first bit of advice would be to have lunch with the in-house accountant of one of the law firms that your real estate firm deals with.  They deal with trust accounts in a similar way and could be very helpful.  You may also want to talk to the accountant that does the annual trust audit (depending on the relationship of your boss with the auditor (ie good relationship – go and talk; bad relationship – maybe still go and talk and the relationship will be better when things go well at audit time  ) I have worked as a Office Manager for a law firm that does lots of real estate transactions so my suggestions will be similar to the lunch meeting with that law office accountant so these are only suggestions from my experience. A final note would be to contact MYOB and see if they can provide the names of a few MYOB certified Consultants in your area that may have experience with Real Estate Rental Agency transactions… or look on their website for a listing. Hope this helps!!! David "Nikolai Smirnov wrote Recently I started working as a stand-alone accountant in a newly established real estate agency. Previously I worked in retail business, and in the new place I faced a problem: HOW TO DEAL WITH TRUST ACCOUNTS. For accounting I use MYOB and for this reason I searched for the solution in "Making the Most of MYOB", "Computer Accounting Using MYOB", MYOB manual and the Internet Support Notes for MYOB. Unfortunately, my effort gave no result. Than I searched dozens of accounting books in a library and again failed to find anything. And finally I talked to a practicing accounting specialist. In the end of the day, it looks like this newsgroup is my last resort. Could anybody kindly advise me: What should be a contra account of the trust account? Answer: The trust account has two parts 1) the money in the bank is an asset, 2) the amount of money that is due to the client (Trust Liability = contra account)  (Hint:  this should equal the money in the trust account)     2    Who deposits money to trust account: customer or vendor (using MYOB terminology), debtor or creditor? Answer: The rentor (Mr Y) provides a cheque to the REA who then deposits it into a trust account and sets up a liability Mrs X ( she is both a Customer (see commission invoices and a "vendor" – not a great term in this situation) ) for the Gross Rent ( Debit:  Trust Account  Credit:  Trust Liability)     3    What would be a transaction of deducting the company

Question:

I’m attempting to buy a sailboat for an amount near $100,000 USD. The buyer insists on funds in US dollar currency. I have the funds in my bank, but it has been recomended to keep the withdrawals under $10,000 for reasons concerning US currency laws etc. After several trips to the bank withdrawing $9,000 at a time, the bank cut me off saying I would have to slow down the frequency of my withdrawals. The seller has a limited time frame and will sell to someone else if I can’t pull through in 10 days. Everything is above the law. The seller knows of someone overseas that will cash a check. I’m leary of trusting someone with life savings. The seller is legit and it’s not a scam. I’m a US citizen, seller is not. Any advice is greatly appreciated!

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I’m attempting to buy a sailboat for an amount near $100,000 USD. The buyer insists on funds in US dollar currency. I have the funds in my bank, but it has been recomended to keep the withdrawals under $10,000 for reasons concerning US currency laws etc. After several trips to the bank withdrawing $9,000 at a time, the bank cut me off saying I would have to slow down the frequency of my withdrawals. The seller has a limited time frame and will sell to someone else if I can’t pull through in 10 days. Everything is above the law. The seller knows of someone overseas that will cash a check. I’m leary of trusting someone with life savings. The seller is legit and it’s not a scam. I’m a US citizen, seller is not. Any advice is greatly appreciated!

If you withdraw over $10,000, you will have to fill out a form at the bank. If the reason for the withdrawal is legitimate, like buying a boat, then there shouldn’t be a problem.  If you want it for drug dealing, then there’s a problem. The larger problem might be explaining why you are exporting $100,000 from the US when you take it out of the country, regardless of how you withdrew it from your bank. A few options: Wire the money to a bank in the target country. Get whatever kind of certified international check is necessary to do the

transaction.  Cash that in the target country. Do the transaction through an escrow agent.  When they have the boat and

the money, do the trade. There are others, but I might be leery too if they want only cash, and

wouldn’t want an intermediary involved.  There are too many legitimate ways to accomplish this transaction without taking cash across the border. — Bryan Johnson, EA Pioneer Tax & Accounting Service   Portland, OR www.oregontaxhelp.com

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I’m attempting to buy a sailboat for an amount near $100,000 USD. The buyer insists on funds in US dollar currency. I have the funds in my bank, but it has been recomended to keep the withdrawals under $10,000 for reasons concerning US currency laws etc. After several trips to the bank withdrawing $9,000 at a time, the bank cut me off saying I would have to slow down the frequency of my withdrawals.

Problem–any set of withdraws that are designed to evade the $10,000 reporting limit must themselves be reported, and a failure to do so is a violation of the law.  Note that this law exists primarily to deal with drug dealers, money laundering, etc. rather than income taxes, since those people tend to prefer cash…

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I’d walk on that deal. Peter

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Question:

I recently came across this SBT accounting program.  It looks pretty good to me.  I was told it is very popular in the States.  Just wonder if anyone has any comments?  And how does it compare to Great Plains? Thanks

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Tony – My last experience (actually my sister was forced to use it) was very bad.  They offer the source code so the product can be customized. Their tech support was not very good and the product had a lot of glitches as well as main issues with data entry.  I do know Great Plains and the cost is around $500.00 per module unless you want to go network with multiple users.  Then they sock it to you. DeeDee Heyne D.B.H. ENTERPRISES – Hide quoted text — Show quoted text – I recently came across this SBT accounting program.  It looks pretty good to me.  I was told it is very popular in the States.  Just wonder if anyone has any comments?  And how does it compare to Great Plains? Thanks

Response:

Interesting, You like to blast the systems always, without definitive benefits/cons of each program.  ALL SYSTEMS HAVE STRENGTHS AND WEAKNESSES.  I know for a fact Todd has put many posts here to help select accounting systems based on what the user needs and how much they want to customize.  Sure, you can use Peachtree.QB and not invest a lot of money, and get a good system if that is what you need.  If you are doing lots of transactions, lots of data movement and reporting flexibility, then you have to spend more money. (This is not saying that Ptree/QB are inferior, just different market type). Having been a Senior Implementor and Project Manager for different accounting systems,  You get what you pay for, always. SBT is a good system for openness.  Great Plains, while a little more closed, offers smooth integrations for 3rd party Apps. The next step is going with SAP, JD Edwards, etc… and spending a lot more money customizing exactly what you want. Todd, can you please post the references for him to do accounting system comparisons? My best advice is do comparisons, know what you are getting into, plan the heck out of implementation, and work with someone who knows the system really well to give you a smooth flow.  Granted there will always be roadblocks that you will hit, but with an open mind, and the proper planning in the beginning, you will achieve what you need. Best of luck and regards, Michael Greymont Sr. IT Director Quantum3d, Inc. Affordable Reality – Hide quoted text — Show quoted text – Tony – My last experience (actually my sister was forced to use it) was very bad.  They offer the source code so the product can be customized. Their tech support was not very good and the product had a lot of glitches as well as main issues with data entry.  I do know Great Plains and the cost is around $500.00 per module unless you want to go network with multiple users.  Then they sock it to you. DeeDee Heyne D.B.H. ENTERPRISES I recently came across this SBT accounting program.  It looks pretty good to me.  I was told it is very popular in the States.  Just wonder if anyone has any comments?  And how does it compare to Great Plains? Thanks

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Question:

Q#1: Does fiber have some minor calorie content? Q#2: Then again,  :) it seems more probable that the 4/4/9 calories per gram for carb/protein/fat are *rounded* values. If you know correct values (to *two* digit precision), then would you please post the correct values.  :)

This is an unanswerable question. At two digit precision you get into territory where you have to know more about the composition of the carbohydrate than is usually known and almost certainly more than you are likely to be able to handle in terms of detail. That is not intended as an insult; it is just that so much affects the value that no one can keep track of it all. The caloric content of starch, for instance, is a function of the average molecular weight, the extent to which the body can hydrolyze it and so on and so forth. People seldom have access to that sort of information. (A few days ago I turned down a request from a client to do molecular weight distribution work on some polysaccharide products. Perhaps others are interested in knowing this sort of thing about food products, too.) Every now and again, I see a post that in order to get a correct carb count on a food portion:   One first subtracts the fiber from the total carbs.

In the US the labeling rules allow you to deduct the insoluble fiber but not the soluble fiber. the old rules allowed you to deduct the total dietary fiber. Plenty of people who do labeling work never actually learned the rules, so you see plenty of labels where the total dietary fiber has been deducted, i.e. labels where the caloric content is understated because of this. Incidentally, I have no opinion on whether the rules represent reality realistically, only on what the rules require. Now I know that the labeling here in the USA permits rounding. A wonderful example is that spray margarine with "zero" calories!   (HAH!   *NOT* bloody likely! )    :(  :(

To what precision do you want it? Do you want it to come with an error bar to reflect the precision of the manufacturing process, the likely precision with which you are likely to deliver the spray to a pan and whatever else affects the reliability of the number or do you just want an unrounded number which represents a statistical estimate to greater precision than is applicable? The rounding rules make sense. That they are also abused is another matter entirely. Perhaps the most accurate generic numbers are from Corinne Netzer’s 3rd Ed.’94 of "The Complete Book of Food Counts" (paperback $6.99 by Dell Publishing):

Don’t count on it. Fiber numbers are notoriously unreliable. There cannot be more than a very few hundred people in the world who can do a fiber measurement properly. (I’ve trained five or six of them.) Practically no commercial food lab can afford to have fiber measurements done by anyone good enough to do it really right. If you want to get a good handle on a fiber number you practically have to talk to the people who did the measurement and you have to know a lot about what affects the accuracy of a fiber measurement. – Shankar (one of those few hundred but I am not going to do another            damn fiber measurement just because I can)

Response:

To: Shankar, Nice post, thank you.  I do have a few questions about your post that I’d appreciate your answering, thanks. – Hide quoted text — Show quoted text – Q#1: Does fiber have some minor calorie content? Q#2: Then again,  :) it seems more probable that the 4/4/9 calories per gram for carb/protein/fat are *rounded* values. If you know correct values (to *two* digit precision), then would you please post the correct values.  :) This is an unanswerable question. At two digit precision you get into territory where you have to know more about the composition of the carbohydrate than is usually known and almost certainly more than you are likely to be able to handle in terms of detail. That is not intended as an insult; it is just that so much affects the value that no one can keep track of it all. The caloric content of starch, for instance, is a function of the average molecular weight, the extent to which the body can hydrolyze it and so on and so forth. People seldom have access to that sort of information. (A few days ago I turned down a request from a client to do molecular weight distribution work on some polysaccharide products. Perhaps others are interested in knowing this sort of thing about food products, too.)

OK.  So I’ll continue to use 4 calories/gm for carbohydrate. Is 4 calories/gm for soluble fiber carbohydrate an appropriate value? Also, you didn’t make any reference to protein and fat. Can they be given to 2 digit precision? For example: 4.x calories/gm for protein.              9.x calories/gm for fat. If there are "accepted" two digit values for protein and fat, would you state what they are, thanks. And yes, I’m well aware that each person will differ from the "norm" in how well their body uses the calories from the food that they eat. – Hide quoted text — Show quoted text -Every now and again, I see a post that in order to get a correct carb count on a food portion:   One first subtracts the fiber from the total carbs. In the US the labeling rules allow you to deduct the insoluble fiber but not the soluble fiber. the old rules allowed you to deduct the total dietary fiber. Plenty of people who do labeling work never actually learned the rules, so you see plenty of labels where the total dietary fiber has been deducted, i.e. labels where the caloric content is understated because of this. Incidentally, I have no opinion on whether the rules represent reality realistically, only on what the rules require. Now I know that the labeling here in the USA permits rounding. A wonderful example is that spray margarine with "zero" calories!   (HAH!   *NOT* bloody likely! )    :(  :( To what precision do you want it? Do you want it to come with an error bar to reflect the precision of the manufacturing process, the likely precision with which you are likely to deliver the spray to a pan and whatever else affects the reliability of the number or do you just want an unrounded number which represents a statistical estimate to greater precision than is applicable? The rounding rules make sense. That they are also abused is another matter entirely. Perhaps the most accurate generic numbers are from Corinne Netzer’s 3rd Ed.’94 of "The Complete Book of Food Counts" (paperback $6.99 by Dell Publishing): Don’t count on it. Fiber numbers are notoriously unreliable. There cannot be more than a very few hundred people in the world who can do a fiber measurement properly. (I’ve trained five or six of them.) Practically no commercial food lab can afford to have fiber measurements done by anyone good enough to do it really right. If you want to get a good handle on a fiber number you practically have to talk to the people who did the measurement and you have to know a lot about what affects the accuracy of a fiber measurement. – Shankar (one of those few hundred but I am not going to do another           damn fiber measurement just because I can)

To: Shankar, Thank you for the response.  :)  :) Cheers,   Bill   Type 1 40 years —

Response:

Q#1: Does fiber have some minor calorie content? Q#2: Then again,  :) it seems more probable that the 4/4/9 calories per gram for carb/protein/fat are *rounded* values. If you know correct values (to *two* digit precision), then would you please post the correct values.  :) OK, now that the scene is set, here are those grusome details that *everybody* just luvs: Every now and again, I see a post that in order to get a correct carb count on a food portion:    One first subtracts the fiber from the total carbs. —— But somehow those nasty calorie counts *still* don’t come out quite right.  :( I mean it’s bad enough that I (a type 1 diabetic) have got to count this stuff.  But when it doesn’t total up right I’m right in there with the accounting guys…  :( (i.e. over the edge and into the abyss…) Now I know that the labeling here in the USA permits rounding. A wonderful example is that spray margarine with "zero" calories!   (HAH!   *NOT* bloody likely! )    :(  :( *AND* of course fiber is not so "simple" as you might think. I mean, we have both "soluble" and "insoluble" fiber. Sometimes you’ll see this *USED* on a food label.  But only occasionally.  For expample, the Quaker Oats oatmeal label gives total fiber and then breaks it down into soluble fiber and insoluble fiber. But the question still stands: are there any *USABLE* calories at all in either type of fiber?? But let’s deal with one example I know of: i.e. wheat bran. Perhaps the most accurate generic numbers are from Corinne Netzer’s 3rd Ed.’94 of "The Complete Book of Food Counts" (paperback $6.99 by Dell Publishing):                     Calorie Tot-Carb Protein   Fat    Fiber                                 gm     gm      gm      gm    1.0 oz wheat bran   61      18.3    4.4     1.2    12.1 Some basics first: calories/1.0 gm of: carbohydrate= 4 calories calories/1.0 gm of: protein     = 4 calories calories/1.0 gm of: fat         = 9 calories So, for 1.0 oz of wheat bran, the effective carb count is 6.2. Therefore when I multiply it out I get total calories for 1.0 oz should be 53 calories.  Which is 8 calories less than what the Netzer book gives. One possible conclusion is that there may be about .7 calories per gm of dietary fiber????? ——- TIA,   Bill — "The time has come," the Walrus said, "To talk of many things:" …                Lewis Carroll —

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Question:

|I just wonder is it necessary for an accountant to pass the Microsoft’s |courses about the networking or the internet? (e.g. the certified |Microsoft System engineer) These courses are so dear and I need people’s |suggestion! I also want to know whether should accountant understand the |networking or the computer programming? |Patpat Information Technology is becoming a hot item in Government auditing at all the PCIE-level Inspector Generals.  Special courses are being developed on information security (INFOSEC).  I think you can check out a link at www.ignet.gov.  As I recall, the Defense Information Systems agency has a number of free computer-based training courses on INFOSEC that were developed with assistance of … I think the National Security Agency.  The courses are a few years old now but still useful. The need is obvious– controls over the information that accountants rely upon and auditors opine about.    Also, with the international threat of cyberterrorism and cyberfraud, a company (or a country) can go broke in minutes, if not adequately protected.  I recall reading a RAND corporation document on the subject– scary.   IMO, all accountants/auditors  need some understanding in order to cope with the future.  One can not rely solely on the experts and accountants/auditors who specialize in this area.     J. Ime (Reverse letters in domain to respond)

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I just wonder is it necessary for an accountant to pass the Microsoft’s courses about the networking or the internet? (e.g. the certified Microsoft System engineer) These courses are so dear and I need people’s suggestion! I also want to know whether should accountant understand the networking or the computer programming? Patpat

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