Contra entry records cash and/or bank account transactions in the accounting journal. This entry’s treatment does not affect the financial statement line item balance. Contra entry affects the debit and credit of cash and cash equivalent. This transaction involves cash, petty cash, banks, and other accounts under cash. If you have to transfer cash from […]
A Bank Reconciliation Statement is a document that notes the similarity and dissimilarities between the cash balance on your Balance Sheet and the amount on the bank statement. When these two accounts are reconciled, you can identify whether there’s a need for accounting changes. To simplify, a bank reconciliation statement summarises your business activity that […]
What is Trial Balance? A trial balance is a financial report that lists a company’s general ledger accounts closing balances at a certain period. A trial balance contains accounts that are the main accounting items, such as assets, liabilities, revenues, expenses, equity, gains, and losses. It is used primarily to establish the debits and credit […]
Financial accounting is different from bookkeeping, and accounting has a dual entry for every transaction – debit and credit. In the dual entry system of accounting, the accountant must first identify which account should be debited and which one should be credited. Accounting revolves around three rules, collectively called the Golden Rules of Accounting. These rules […]
The GAAP or Generally Accepted Accounting Principles comprises a set of commonly followed accounting standards, procedures, and principles for financial reporting. GAAP is the basis of accounting procedures, as approved and used by the FASB or Financial Accounting Standards Board. 10 Principles of GAAP There are 10 general notions that line up the main mission […]
Outsourcing accounting services are exclusive accountant tools that are used to withdraw non-core functions of full-time accountants from the third party. It helps expand the range of services and cut down ongoing accountant costs. It has been very popular among entrepreneurs to get competitive advantages and reduce financial risks. Companies with highly qualified professional accounting […]
Accounting is a critical aspect of any business. It ensures that sound financial decisions are made for the success and smooth running of the business. Usually, it involves the preparation and consolidation of financial statements and accounting reports for easy evaluation by stakeholders of a business entity in order to foster transparency, accuracy, and reliability. […]
Conducting an audit can be a very complex and time-intensive task and this is the reason not many entrepreneur and businessmen want to initiate the process of an audit in their company. Nevertheless, every business should conduct an audit at regular intervals. This would reveal the loopholes and malpractices, if any, being followed in the […]
In recent years, there have been considerable changes in the business landscape. The increasing globalization, free movement of people, easy communication, technological advancements, and the shrinking of the world have helped change the business environment. These factors have led to the rapid growth of established businesses and the sprouting of new ones. However, this growth […]
You may hear professional investors, corporate officers, and investment analysts talk about a company’s capital structure. The concept is extremely significant because it can affect the return a company earns for its shareholders and whether or not a firm gets through in a recession or depression. Firstly, let us take a moment to know what capital structure is and […]
