Categoria: Bookkeeping

This concept will seem strange at first, but it’s designed to be a self-checking system and to give twice as much information as a simple, single-entry system. Accounting software such as QuickBooks, FreshBooks, and Xero are useful for balancing books since such programs automatically mark any areas in which a corresponding credit or debit is […]

Conversely, when the company makes a payment to settle its obligations, the accounts payable account is debited. The expenses and losses are also debited on the normal balance of the accounts payable of a company’s accounts payable natural balance balance sheet. As the liabilities, accounts payable normal balance will stay on the credit side. On […]

When used in conjunction with the other financial statements, an income statement can give you a clear view of your cash flow. Small businesses typically start producing income statements when a bank or investor wants to review the financial performance of their business to see how profitable they are. Operating income is the result of […]

Base your pricing on profit margins and sales to ensure your rates are reasonable and workable. This begins with examining your budget and breaking it down to its components. Make sure you’re not overspending in any area of your business finances. Regular variance analysis helps companies understand deviations between forecasts and actuals, identify variance drivers, […]

The first accounting option is to make no journal entry and disclose the amount of appropriation in the notes to the financial statement. The second option is to record a journal entry that transfers part of the unappropriated retained earnings into an Appropriated Retained Earnings account. To illustrate, assume that on March 3, Clay Corporation’s […]

For purposes of this section, a sublease shall be treated in the same manner as a lease of the underlying property involved. All persons treated as a single taxpayer under section 41(f)(1) shall be so treated for purposes of this paragraph. For exclusion of intangibles acquired in certain transactions, see subsection (f)(9). Though the conditions […]

Then, come January, you want to record your rent expense for the month. You’ll move January’s portion of the prepaid rent from an asset to an expense. Then, in March, when you deliver your talk and actually earn the fee, move the money from deferred revenue to consulting revenue. Once you’ve wrapped your head around […]

The calculator will give the correct answer whether or not the two locations have different sales tax rates. In the event the tax rate is a percentage, you drop the percentage sign and divide the tax amount by 100 to get the decimal numbers for the tax rate. Or you can move the decimal point […]

Now, with the adoption of accounting software into most businesses, the trial balance is not as central, but it’s still a part of the cycle. You might be wondering why it is such a big deal to organize the trial balance in this manner. The purpose of the trial balance is to make your life […]