Recent Articles

Sections of the Income Statement

Describes the revenue, costs of goods sold/services provided, and overhead expenses associated with the profit and loss statement. Other terms are reviewed so the reader of the financial report has a comprehesive understanding of the report.

Financial Statements for the Small Business

07/02/2015

Financial statements serve the purpose of presenting economic activity and status related to a particular date and over a particular time frame.  Accountants record monetary transactions and via financial reports present the information in an easy [...]

Returns, Allowances and Discounts in Accounting

12/24/2014

In the revenue section of every income statement (profit and loss statement) is an adjustment group to sales.  This group reflects the value related to the actual sale of the product or services.  This adjusting group is comprised of three [...]

Chart of Accounts – Layout

11/27/2013

The goal of accounting is to record the economic activity of the business.  This is achieved by entering each economic transaction into a set of books.  The books are formatted to reflect the balance sheet and income statement items.  The chart [...]

Revenue and Sales – What is the Difference?

06/03/2013

Sales are a component of revenue.  Revenue encompasses several sources of income including sales.  Other sources of revenue include interest, trust monies, royalties, and fees.  In effect, revenue includes all sources of income, realized and [...]

How is Cost of Goods Sold in Retail Determined?

02/16/2013

Each industry is different in determining costs of goods sold or cost of services rendered.  Retail uses two distinct methods to calculate costs of goods sold.  The first is called ‘Specific Identification’ whereby each item sold is [...]

What is Accrual Accounting?

02/11/2013

Accrual accounting is the preferred method of accounting for all business operations.  Any publicly traded company must comply with the principles of accrual accounting.  Small business operations can choose between cash and accrual accounting for [...]

Accounting Principles

11/26/2012

Simply stated, accounting is the measurement of economic activity.  Its primary principle is to report information to the user so that (s)he can make informed decisions.  The primary reporting format is in the form of dollars.  There are two [...]