Tag: Accounting
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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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Bookkeeping – Parent–Child Accounts (Lesson 17)
When one account is fed information from several sources based on function or location, this account structure is referred to as a ‘Parent-Child’ account.
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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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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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Profit and Loss Statement Using Class Accounting
Class accounting breaks down sales and the associated cost of sales into functional groups. Whether you use divisions or departments or product/service lines class accounting allows you to identify those more profitable areas of operations.