Posts tagged Basic Accounting

The regulators do not permit a business organized as a C-corporation (in the United States) to use cash basis accounting. Instead, these companies must use …

Ownership in a corporation is represented by stock certificates, which is why the owners are called stockholders. In some states, stockholders are called shareholders. Ownership …

In the business world, a partnership is an association of two or more persons to carry on a business as co-owners for profit. Many aspects …

The primary objectives of the accounting function in an organization are to process financial information and to prepare financial statements at the end of the …

Checking Accounts (Account 1000) is the account that you set up in the Chart of Accounts and the General Ledger as your operating account. This …

You may think that two businesses that are identical in every financial respect and have identical transactions during the year would report identical financial statements. …

The basic theory of depreciation accounting is unarguable: The amount of capital a business invests in a fixed asset, less its estimated future residual (salvage) …

Recalling my other post about: Basic Accounting: Debit and Credit – Double Entry [a really basic accounting knowledge]. After reading the post you should know how …

Businesses must expect to sustain some losses from uncollectible accounts and should therefore show on the balance sheet the net amount of accounts receivable, the …

A large portion of all business transactions are credit transactions. One way of extending credit is by the acceptance of a “promissory note“, a contract …

Although a physical inventory is taken once a year, there are occasions when the value of the inventory must be known during the year. When …

Hopefully this post helps you understand the role and function of accounting record as source documents (such as: bills, invoices) and introduces the books of …

Businesses keep two types of account; Real Accounts and Nominal Accounts. What is Real Account? What is Nominal Account? The following explanations may deliver easier understanding for …

In a financial report, the income statement may seem like a tub standing on its own feet, disconnected from the balance sheet and the statement …

Many business owners think of bookkeeping as a necessary evil, but in reality if you make effective use of the data collected, bookkeeping can be …

When setting up a business, the first major accounting decision that must be made is whether to keep the books using the cash-basis accounting method …

I know many of you have been requesting for some posts to cover basic accounting for dummies topic, so here I am coming with the …

An understanding of the principles of bookkeeping and accounting is essential for anyone who is interested in a successful career in business. The purpose of …