Within these main categories, you can create sub-accounts to add granularity. For instance, under expenses, you might have sub-accounts for legal research, office supplies, or marketing. Examples of these expenses are fees for transportation, court filings, expert witnesses, transcripts, medical records, etc. Accounting, on the other hand, deals with interpreting and presenting this financial information...Read More

A transaction can be deferred into the next period if it does not meet the reporting requirements of the current period. Conversely, a company can also distribute funds in reserve to increase earnings and subsequently minimize investment. With accounting conservatism, current earnings are increased, making them a poor indicator of the future marginal return. Such...Read More

This process involves careful consideration of the date, account, description, and amount fields to accurately reflect the financial transaction. Users should also double-check the chart of accounts to ensure the appropriate accounts are selected for all transactions. It’s essential to review and confirm the accuracy of the journal entry before saving it to maintain the...Read More

The information found in a company’s balance sheet is among some of the most important for a business leader, regulator, or potential investor to understand. If you were to add up all of the resources a business owns (the assets) and subtract all of the claims from third parties (the liabilities), the residual leftover is...Read More

Once the service or product has been provided, the unearned revenue gets recorded as revenue on the income statement. In summary, unearned revenue is a vital concept within accrual accounting, helping provide a more accurate representation of a company’s financial position. By understanding and accurately recording unearned revenue, businesses can better manage cash flow and...Read More

It is essential to note that businesses do not create a new “trade discount account” to post the transaction in the books of accounts. It is neither recorded in the books of accounts of the manufacturer nor the wholesaler/retailer. It is when the seller offers a series of discounts on the product. Here, we calculate...Read More

Content Save time & make more money with DoorLoop Setting Up QuickBooks For Your Rental Property Features where QuickBooks is robust “Makes my accountant happy” Best Real Estate Accounting Software ( This will enable you to make smarter decisions in the future. The benefit of using classes, especially if you have multiple businesses within one...Read More

Whether you’re starting a brand-new business or you have some experience under your belt, creating a solid accounting plan can help you monitor and maintain your financial health. If you select one accounting method and then decide that you’d like to change it after filing your taxes, you’d need to complete IRS Form 3115 to...Read More

Content DIY or Hire a Professional for Bookkeeping and Accounting? Bookkeeping (Accounting) Services Agreement Hire a Bookkeeper Best Full-Service App Build Up Your Contractor Business With We’ll find deductible business expenses that you didn’t know about and auto-categorized for your Schedule C. Use built-in reports to see how your business is doing and take advantage...Read More

With increasing globalization and companies operating in many countries, the books of accounts must be compatible with a global platform. They are also the result of globally accepted accounting principles for accurately reporting financial numbers. As we have seen in the above discussion, how reporting contra assets accounts helps in a better understanding of the...Read More