The basic accounting equation is a simple formula where assets are equal to liabilities plus shareholder equity, but this basic equation can be made more granular to provide greater insight into equity transactions. The type of business impacts the expanded accounting equation format, but the concept is still the same – a detailed accounting of …
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What is a General Ledger? How is it Used & Examples Accountants use a standardized record keeping system to monitor business transactions and financial data relevant to an organization. The general ledger can be kept in a spreadsheet, but it’s often a part of a financial accounting software package. Below are details and an example …
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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 part of the accounting system used to track outstanding checks, helping accountants and business owners …
Discounts and rebates are offered by sellers of goods and provider of services to incentivize buyers and speed up the cash collections process. Trade practices and cash discounts each have advantages related to generating revenue and enhancing cash flow. Below are the key differences between these techniques and how they impact the bottom line. Trade …
What is the difference between a trade discount and a cash discount? Read More »
The inventory record consisting of business operation transactions such as merchandise purchases and purchase returns may be simple or complex, given the size and type of business and the resources available to the accounting department. The key is to start with a well-accounted for beginning inventory and tracking it all the way to the ending …
What is the difference between perpertual and periodic inventory systems? Read More »