Chart of Accounts COA Definition, How It Works, and Example
While IFRS and US GAAP, are clear the condition (transfer of control) for recognizing revenue, they make no mention of the accounts to be used. Although it is an IFRS/US GAAP advisory firm, the owner of this web site is a legal entity domiciled in the Czech Republic. When XBRL was still new, our clients…
Prepaid Expenses Guide: Accounting, Examples, Entries & More Explained
Clearly, no insurance company would sell insurance that covers an unfortunate event after the fact, so insurance expenses must be prepaid by businesses. Accounting records that do not include adjusting entries to show the expiration or consumption of prepaid expenses overstate assets and net income and understate expenses. The process of recording prepaid expenses only…
Understanding Goodwill in Accounting: A Comprehensive Guide for Business Owners & Students
Going concern value is more of a financial projection into the future and an estimate of how much a company’s acquired assets will continue to earn. When business goodwill value and going concern value are combined, you have a rough estimate of the business’s overall valuation. Goodwill is an intangible asset that can relate to…
Adjusting Entries and Reversing Entries
In month 2 wages of 4,000, which includes the 1,500 from month 1, are paid, and the following journal has to be made. Suppose, for example, a business pays its employees part way through a month and therefore has to make an adjusting entry at the end of the month for wages earned but not…
Conservatism Principle Definition + Examples
However, the unrecorded reserves created by the lower earnings give the flexibility to report more earnings in the future. A company can inject more funds in reserve to increase investment, thereby reducing earnings. Accounting conservatism refers to financial reporting guidelines that require accountants to exercise a high degree of verification and utilize solutions that show…
Dividends Declared Journal Entry
United Bancorp Inc. declared a 15 cents per share special dividend on Feb. 23, 2023. Any net income not paid to equity holders is retained for investment in the business. In contrast, an established business might not need to retain profits and will distribute them as a dividend each year. The investors in such businesses…
Software for Bookkeepers and Accountants
Get started by signing up for the Intuit Bookkeeping Certification program today. A bookkeeping certificate can help you find a bookkeeping role, either as an in-house bookkeeper or as a freelancer. Bookkeeping lays the groundwork for many accounting processes, so you can use your experience and knowledge as a stepping stone to becoming an accountant….
Relevant cash flows FFM Foundations in Financial Management Foundations in Accountancy Students
Companies tend to assess the viability of an investment project by calculating a project’s net present value (NPV), internal rate of return (IRR), and payback period. Incremental Only cash flows that arise because of the decision being made should be included; any cash flow that would have arisen anyway, sometimes referred to as a committed…
How to Automate Your Accounts Receivable Process
Automated systems follow routines which inherently make errors harder to happen. From the moment you generate a customer invoice to the final reconciliation of payment received, your accounts receivable is a process primed and ready for automation to step in and streamline your workflow. Cashflow.io ensures a smooth onboarding experience, enabling you to connect your…
Accounting ledgers: A beginners guide to ledgers for 2023
Now let’s look at the other side of the transaction – the Loan account. The left-hand side is known as the debit side and the right-hand side is the credit side. Posting is the process of transferring the all the transactions to the ledger. Whenever a transaction takes place it is denoted and recorded in…