Recent Articles

Business Principles Accounting

Accounting’s primary principle is the measurement of economic activity. The American Institute of Certified Public Accountants provide the concepts and principles in measuring economic activity and how those financial transactions are recorded.

Cash Ratio


One of the liquidity ratios used in business is the cash ratio.  It is a much more effective tool for small business than the traditional current or quick ratio.  Although the cash ratio is more difficult to manipulate in small business, most [...]

Bookkeeping – Departmental Accounting (Lesson 71)


One of the goals of accounting is to report to management performance results, specifically financial performance.   Since most businesses sell more than one product or render more than one service, management is interested in understanding the [...]

Bookkeeping – Advanced Skillsets (Lesson 70)


Lessons 1 through 28 covered the fundamentals of bookkeeping.  This includes the six different types of accounts and their relation to the dual entry system.  In addition, debits and credits were explained in how they impact the financial [...]

Bookkeeping – Closing the Books (Lesson 69)


All the lessons to date lead into this one long and arduous task with bookkeeping called ‘Closing the Books’.   Closing of the accounting records is performed at the end of interim and fiscal year periods.   The end of the year [...]

Bookkeeping – Adjusting Journal Entries (Lesson 67)


One of the many tasks for bookkeeper in their daily operations is reconciling accounts including bank accounts, accounts receivable, accounts payable and many others.   Invariably, the balances are off and need adjusting.   To reset or balance [...]

Bookkeeping – Complex Entries Expanded (Lesson 66)


A journal entry with multiple lines of entry affecting several different ledgers (accounts) is commonly referred to as a complex entry.   Many bookkeepers shy away from them as they feel intimidated by the difficulty involved and do not want to [...]

Bookkeeping – Recurring Entries (Lesson 65)


Every day bills arrive from vendors that are mere repetition like the electric or phone bill.   They basically recur every so often (mostly monthly).   The bookkeeper must create a new entry as a part of his/her  daily functions.   This [...]

Bookkeeping – Charitable Giving (Lesson 64)


Many small business owners are actively involved in the community and thus donate time and money to their favorite cause.   In almost every case the owner believes the donation is a business deduction.     It is NOT a business deduction for tax [...]

Receivables Turnover Ratio


One of the activity ratios in business is the receivables turnover ratio or rate.   This ratio measures the frequency of collecting the entire balance of accounts receivable during a standard accounting year.   The ideal turns rate is twelve [...]
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