Category: Business Principles
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Bookkeeping – Cash or Accrual (Lesson 25)
Generally Accepted Accounting Principles (GAAP) advocates using the accrual basis of accounting over cash basis. The difference between the two methods is important to understand as a bookkeeper.
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Bookkeeping – The Accounting Equation (Lesson 24)
The accounting equation is a simple formula used frequently in business. The formula is: Assets = Liabilities plus Equity OR Equity = Assets minus Liabilities.
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Bookkeeping – Schedules (Lesson 23)
In accounting there are books (journals) and ledgers for source entry of information. A trial balance is used to monitor the types of accounts. With the use of parent-child accounts and control accounts bookkeepers can generate a wide array of reports. Unfortunately this still lacks the breath of supporting information needed. The profession uses schedules to augment the reports.
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Bookkeeping – Control Accounts (Lesson 22)
Control accounts are used when there are multiple third parties interacting with the business in regards to similar function.
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Bookkeeping – Proper Income Statement Presentation (Lesson 21)
The income statement presents information over a period of time. This time period is referred to as an accounting cycle.
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Bookkeeping – Proper Balance Sheet Presentation (Lesson 20)
The balance sheet serves as an historical report. It identifies the accumulated change in value since inception.
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Bookkeeping – Other Expenses and Revenue (Lesson 19)
In accounting sometimes an extraordinary event occurs. When this happens the associated revenue and expense is recorded in the expense type of accounts.
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Bookkeeping – Chart of Accounts Using the Numbering System (Lesson 18)
To speed up the process of entering information accountants converted account names to numbers.
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Gross and Net Sales
Many of the business performance standards are measured against a baseline. For the bulk of production and operation performance tools the baseline is net sales.
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Amortization of Financing Costs
When a business acquires a loan there are typically closing costs involved. Generally Accepted Accounting Principles (GAAP) require these financing costs to be amortized (allocated) over the life of the loan. There are several principles the reader needs to understand to properly calculate and assign these costs to the financial statements. This lesson explains the basic business…