Category: Business Principles
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Bookkeeping – Debits and Credits with the Trial Balance (Lesson 16)
The primary report used by accountants is the trial balance. It is the job of the bookkeeper to make sure that it is in balance and that there are no abnormal values within the respective types of accounts.
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Bookkeeping – Complex Entries (Lesson 15)
Many bookkeepers are initially misinformed about the dual entry accounting system. They think that based on the wording that accounting entries have only two lines of information, one line for a debit and a second line for a credit. What the words dual entry mean is that debits must equal credits.
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Bookkeeping – Debits and Credits in Parenthesis with the Profit and Loss Statement (Lesson 14)
Both contra and atypical values are reported with parenthesis. The same presentation format is used when reporting contra and atypical values on the profit and loss statement (income statement).
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Working Capital Management – Fundamentals
Working capital management is a function of finance whereby management ensures adequate cash is available to meet operational needs over the typical working capital cycle.
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Treasury Stock – Fundamentals of Stock
Those corporations doing well and flush with cash sometimes buy back stock from their investors. Once purchased back by the company, the stock is called treasury stock.
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Working Capital
Cash is the lifeblood of every business. Without cash a business operation can come to a standstill. Cash is one component of working capital, a term referring to current assets (Gross Working Capital) less payables and accrued expenses.
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Cash Flow – Introduction
Insolvency is defined as the inability to pay liabilities as they come due. To meet the demand of creditors cash is required. For most small businesses there are as little as a single source to multiple sources of cash.
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Perpetual Inventory
Most small businesses use the annual inventory system to determine ending inventory value. Any adjustments are to the income statement inside the cost of goods sold formula. This is acceptable if management only wanted accurate financial statements once a year. But this is unrealistic for a small business.
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Front and Back Offices -Differences
The terms ‘Front’ and ‘Back Office’ are used in business to refer to the form of office work conducted. In general the front office interacts with customers/clients and handles the day-to-day activity. The back office is where management leads the organization and handles the underlying financial affairs.
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Office Management- Introduction
Every small business has a physical spot to process paperwork, whether it’s a notebook in a truck for a contractor or a large building complex with tens of employees for a multi-million dollar operation, the paperwork has to get processed somewhere. But there is more to this than the physical facility, it is more about the…