Accounting Tools

JULY 12, 2023

Related Courses Accountants’ Guidebook Bookkeeper Education Bundle Bookkeeping Guidebook What is Accrual Accounting? Accrual accounting is the recording of revenue when earned and expenses when incurred. Accrual accounting results in the most accurate picture of how well a business is actually performing.

Accruals 40

Accruals Accounting Accounting Financial Statements 40

Accounting Tools

JUNE 12, 2023

Related Courses Accountants’ Guidebook Bookkeeper Education Bundle Bookkeeping Guidebook What is the Accrual Basis? Accrual basis is a method of recording accounting transactions for revenue when earned and expenses when incurred. The alternative method for recording accounting transactions is the cash basis.

Accruals 40

Accruals Financial Statements Bookkeeping Invoicing 40

Accounting Tools

AUGUST 6, 2023

This concept is the basis of double entry accounting , which is required by all accounting frameworks in order to produce reliable financial statements. If management wants to have its financials audited, it must accept the dual aspect concept and maintain its accounting records using double-entry accounting.

Accruals 75

Accruals Financial Statements Bookkeeping Accounts Payable 75

Accounting Tools

OCTOBER 4, 2023

Related Courses The Interpretation of Financial Statements What is Profitability? Profitability is a situation in which an entity is generating a profit. Profitability arises when the aggregate amount of revenue is greater than the aggregate amount of expenses in a reporting period.

Accruals 75

Accruals Financial Statements Tax Accounting 75

Accounting Tools

MARCH 31, 2023

Related Courses Bookkeeping Guidebook Closing the Books The Year-End Close What is an Under Accrual? An under accrual is a situation in which the estimated amount of an accrual journal entry is too low. This scenario can arise for an accrual of either revenue or expense.

Accruals 40

Accruals Financial Statements Accounts Payable Accounts Payable 40

Accounting Tools

OCTOBER 23, 2023

Related Courses Governmental Accounting What is Modified Accrual Accounting? Modified accrual accounting combines aspects of accrual basis accounting with cash basis accounting. The purpose of this approach is to measure the flows of current financial resources in governmental fund financial statements.

Accruals 40

Accruals Accounting Accounting Financial Statements 40

Accounting Tools

OCTOBER 25, 2023

Related Courses Financial Analysis The Interpretation of Financial Statements What is the Accounting Breakeven Point? This concept is used to model the financial structure of a business.

Accruals 75

Accruals Accounting Accounting Financial Analysis 75

Accounting Tools

SEPTEMBER 11, 2023

A transaction is a business event that has a monetary impact on an entity's financial statements , and is recorded as an entry in its accounting records. Alternatively, under the accrual basis of accounting , a transaction is recorded when revenue is realized or when an expense is incurred, irrespective of the flow of cash.

General Ledger 75

General Ledger Accruals Financial Statements Bookkeeping 75

Accounting Tools

JUNE 11, 2023

In the absence of a journal entry, the expense would not appear at all in the entity's financial statements in the period incurred, which would result in reported profits being too high in that period. Income taxes are typically retained as accrued expenses until paid, which may be at the end of a quarter or year.

Accruals 75

Accruals Accounts Payable Accounts Payable Invoicing 75

Accounting Tools

MAY 21, 2023

The general ledger is then used to create financial statements for the business. This information may be accessed by the external auditors as part of their year-end investigation of a company's financial statements and related systems. It is frequently used to record complex transactions, or several transactions at once.

General Ledger 75

General Ledger Financial Statements Accruals Payroll 75

Accounting Tools

DECEMBER 20, 2023

In most cases, an accounting entry is made using the double entry bookkeeping system , which requires one to make both a debit and credit entry, and which eventually leads to the creation of a complete set of financial statements. This type of accounting entry is used under both the accrual basis and cash basis of accounting.

Accounting 75

Accounting Accounting Accruals General Ledger 75

Accounting Tools

JULY 13, 2023

The unadjusted trial balance is the listing of general ledger account balances at the end of a reporting period, before any adjusting entries are made to the balances to create financial statements. The unadjusted trial balance is used as the starting point for analyzing account balances and making adjusting entries.

General Ledger 74

General Ledger Financial Statements Accruals Bookkeeping 74

Accounting Tools

AUGUST 6, 2023

It is especially necessary to create year-end adjustments when the financial statements are to be audited by the company’s auditors. Examples of Year-End Adjustments Examples of the many types of year-end adjustments are as follows: Accrual of expenses for which supplier invoices have not yet been received.

General Ledger 75

General Ledger Accruals Billing Reconciling 75

Accounting Tools

MAY 21, 2023

These adjustments are designed to bring the company's reported financial results into compliance with the dictates of the relevant accounting framework , such as Generally Accepted Accounting Principles or International Financial Reporting Standards. The adjustments are primarily used under the accrual basis of accounting.

Accruals 75

Accruals Accounting Accounting Billing 75

Accounting Tools

NOVEMBER 5, 2023

Liquidation basis accounting is concerned with preparing the financial statements of a business in a different way if its liquidation is considered to be imminent. Liquidation Basis Financial Statements Under the liquidation basis of accounting, a business must issue two new statements, which are noted below.

Accruals 71

Accruals Accounting Accounting Financial Statements 71

Accounting Tools

JUNE 7, 2023

Related Courses The Interpretation of Financial Statements The Statement of Cash Flows What is Net Cash Flow? This concept is used to discern the short-term financial viability of a business, which is considered to be its ability to generate cash. Terms Similar to Net Cash Flow Net cash flow is also known as cash flow.

Accruals 73

Accruals Financial Statements Accounting Accounting 73

Accounting Tools

NOVEMBER 7, 2023

Related Courses The Balance Sheet The Income Statement The Interpretation of Financial Statements What is a Profit and Loss Statement? A profit and loss statement aggregates the revenues , expenses , and profits or losses of a business.

Financial Statements 74

Financial Statements Accruals Tax Accounting Software 74

Accounting Tools

AUGUST 31, 2023

This is one of the three financial statements (the other two are the income statement and balance sheet ). Smaller organizations may not release a statement of cash flows on a monthly basis, since some additional effort is required to create it.

Accruals 75

Accruals Financial Statements Accounts Payable Accounts Payable 75

Accounting Tools

FEBRUARY 16, 2024

If the accrual basis of accounting is used, this can result in a figure that is different from what cash flows would indicate, due to the accrual of expenses for which payments have not yet been made. This is used to determine the amount of earnings generated in a reporting period, net of income taxes.

Accruals 75

Accruals Financial Statements Account Receivables Accounts Receivable 75

Accounting Tools

MAY 15, 2023

If a company is using the accrual basis of accounting , it should record an allowance for doubtful accounts, since it provides an estimate of future bad debts that improves the accuracy of the company’s financial statements. Actual results may vary from management’s expectations for accounts receivable collections.

Account Receivables 75

Account Receivables Accounts Receivable Accounts Receivable Accounting 75

Accounting Tools

JANUARY 26, 2024

This is one of the most essential concepts in accrual basis accounting , since it mandates that the entire effect of a transaction be recorded within the same reporting period. Accounting for the Matching Principle Recording items under the matching principle typically requires the use of an accrual entry. In short, no.

Accruals 75

Accruals Bookkeeping Financial Statements Invoicing 75

Accounting Tools

AUGUST 21, 2024

Net Cash Flow Net profit is not the same as net cash flows, which appears in the statement of cash flows. Differences between net profit and net cash flows include timing issues related to accrual-basis accounting and the reduction of cash flows caused by expenditures for fixed assets.

Accruals 52

Accruals Financial Statements Tax Accounting 52

Accounting Tools

AUGUST 14, 2024

The modified cash basis of accounting uses elements of both the cash basis and accrual basis of accounting. In essence, the modified cash basis uses the cash basis of accounting, with accrual adjustments added to it. Otherwise, an outside auditor will not sign off on its financial statements.

Accruals 40

Accruals Financial Statements Accounting Accounting 40

Accounting Tools

OCTOBER 26, 2023

The basis of accounting refers to the methodology under which revenues and expenses are recognized in the financial statements of a business. Accrual Basis of Accounting Under the accrual basis of accounting , a business recognizes revenue when earned and expenses when expenditures are consumed. They are noted below.

Accruals 40

Accruals Financial Statements Accounting Accounting 40

Accounting Tools

JULY 20, 2024

This approach is only used under the accrual basis of accounting. Accruals for immaterial amounts. It is not useful or necessary to record accrued interest when the amount to be accrued is immaterial to the financial statements. Accounting by the payment recipient.

Accruals 40

Accruals Financial Statements Bookkeeping Accounting 40

Accounting Tools

JULY 31, 2024

Net income derived under the cash basis of accounting can vary substantially from net income derived under the accrual basis of accounting , since the first method is based on cash transactions , and the latter method records transactions irrespective of changes in cash flows.

Accruals 52

Accruals Financial Statements Tax Auditing 52

Accounting Tools

APRIL 5, 2023

Final accounts is a somewhat archaic bookkeeping term that refers to the final trial balance at the end of an accounting period from which the financial statements are derived. The primary financial statements are the income statement , balance sheet , and statement of cash flows.

Accruals 40

Accruals Financial Statements Accounting Accounting 40

Accounting Tools

SEPTEMBER 1, 2023

A deferral-type adjusting entry is only used in accrual basis accounting , and usually only during the closing process, in preparation for the release of financial statements. This journal entry may be used to defer the recognition of revenue or an expense.

Accruals 40

Accruals Financial Statements Bookkeeping Accounting 40

Accounting Tools

JULY 19, 2023

Once the standard periods have been set up for financial reporting , accounting procedures are designed to support the ongoing and standardized production of financial statements for the designated periods. Standard Period Durations The main periodicity issue is whether to produce monthly or quarterly financial statements.

Accruals 40

Accruals Financial Statements Bookkeeping Financial Reporting 40

Accounting Tools

JULY 8, 2024

Related AccountingTools Courses The Income Statement The Interpretation of Financial Statements Accounting for Utilities Expense The utilities expense incurred by a company's manufacturing operations is considered part of its factory overhead. A utilities provider may require a deposit from a business prior to providing service.

Accruals 40

Accruals Deposits Invoicing Billing 40

Accounting Tools

JULY 24, 2023

This concept is used under the accrual basis of accounting , where income can be earned even when the related cash has not yet been received. Under the accrual basis, the investing entity should accrue its best estimate of the income in the accounting period in which it earns the income. This usually delays the recognition of income.

Accruals 40

Accruals Financial Statements Billing Bookkeeping 40

Accounting Tools

SEPTEMBER 11, 2023

When financial statements are prepared for fiduciary funds, they are presented using the economic resources measurement focus and the accrual basis of accounting. The required financial statements for a fiduciary fund are the statement of fiduciary net position and the statement of changes in fiduciary net position.

Accruals 40

Accruals Financial Statements Auditing Accounting 40

Accounting Tools

JUNE 15, 2023

Under the accrual basis of accounting , a business should record interest revenue even if it has not yet been paid in cash for the interest, as long as it has earned the interest; this is done with an accrual journal entry. Interest revenue is the earnings that an entity receives from any investments it makes, or on debt it owns.

Accruals 40

Accruals Deposits Financial Statements Bookkeeping 40

Accounting Tools

NOVEMBER 6, 2023

Related Courses Business Ratios Guidebook Effective Sales Management The Interpretation of Financial Statements What is Sales Turnover? Thus, it does not include gains from financial or other activities, such as interest income , gains on the sale of fixed assets , or the receipt of payments related to insurance claims.

Accruals 40

Accruals Financial Statements Billing Accounting 40

Accounting Tools

SEPTEMBER 29, 2023

Estimates are used in accrual basis accounting to make the financial statements more complete, usually to anticipate events that have not yet occurred, but which are considered to be probable. An accounting estimate is an approximation of the amount of a business transaction for which there is no precise means of measurement.

Accruals 40

Accruals Accounting Accounting Financial Statements 40

Accounting Tools

FEBRUARY 8, 2024

Related Courses The Statement of Cash Flows Presentation of Cash Outflow The general categories of cash flow (operating, investing, and financing) are located within the statement of cash flows , which is one of the financial statements that a business produces.

Accruals 40

Accruals Record Keeping Financial Statements Accounting 40

Accounting Tools

SEPTEMBER 28, 2023

An accounting change may require discussion in the notes accompanying the financial statements. This is needed so that the users of the statements can ascertain the extent to which an accounting change triggered a variation in the financial statements. They are covered in more detail below.

Financial Statements 40

Financial Statements Accounting Accounting Accruals 40