FAQ

What is an outstanding check?

During the purchasing and accounts payable process, cash disbursements are often-times remitted using business checks. These instruments are among the oldest and most commonly used to pay for everything from raw materials and payroll to capital projects. Bank reconciliations and cash disbursement reports are the tools used to track outstanding checks, helping accountants and business …

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What is the difference between a trade discount and a cash discount?

Discounts are offered by sellers of goods and services to incentivize buyers and speed-up the cash collections process. Trade and cash discounts each have advantages related to generating revenue and enhancing cash flow. Below are the differences between these techniques and how they impact the bottom-line. Trade Discount Definition Sellers in business-to-business transactions will offer …

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What is the difference between perpertual and periodic inventory systems?

Recording inventory transactions such as inventory purchases may be simple or complex, given the size of a business and the resources available to the accounting department. The needs of financial statement users, along with applicable accounting standards, also factor into the recordation process. The perpetual and periodic inventory systems are viable options for recordkeeping purposes, …

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