In cash-based, you recognize revenue when you receive cash into your business. In other words, any time cash enters or exits your accounts, they are recognized in the books. This means that purchases or sales made on credit will not go into your books until the cash exchanges. As you can see, bookkeeping is only a small part of the … [Read more...]

However, you should have a unit price along with any discount terms clearly outlined in the contract. If you have any kind of rewards, rebates, or anything else that may cause a customer’s contract to deviate from the standard price or payment terms, and needs to be taken into account at the beginning. Businesses that use this method take an … [Read more...]

Thank you for reading this guide to understanding the accounting concept of the matching principle. This means that all resources needed to earn this revenue have been used, all steps needed to earn this revenue have been taken, and there is no apparent reason for this revenue not being received by the business. If you're using the wrong … [Read more...]

Note that this means the bond issuance makes no impact on equity. You might notice there is no minus sign on the debit side of the Capital Contributions category. When you leave a comment on this article, please note that if approved, it will be publicly available and visible at the bottom of the article on this blog. For more information on how … [Read more...]

A chart of accounts lists each account type, and the entries you need to take to either increase or decrease each account. Although each account has a normal balance in practice it is possible for any account to have either a debit or a credit balance depending on the bookkeeping entries made. For this reason the account balance for items on the … [Read more...]

The difficulty of the CPA certification process depends on your accounting skills and exam prep. Note that you must obtain passing scores on all four individual sections of the exam to qualify for CPA certification. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational … [Read more...]

Compounding increases the account balance on which the accrual calculations are made. If interest compounds monthly, then every month has a compound date on which accrued interest is summed up and added to the account balance. This total becomes the new (and larger) base balance on which the next phase of daily interest accrual will be calculated. … [Read more...]

Just make sure to keep the focus on the interview and not get too far off track. If you are running late for an interview, it's important to let the interviewer know as soon as possible. You can try calling or emailing to let them know that you are running behind and to give an estimated arrival time. T's generally not appropriate to bring a friend … [Read more...]

Without depreciation, a company would incur the entire cost of an asset in the year of the purchase, which could negatively impact profitability. Using the straight-line method, you depreciation property at an equal amount over each year in the life of the asset. Accumulated depreciation is not a current asset, as current assets aren’t depreciated … [Read more...]

But the straight line accounting method is the most common way to manage both on the income and cash flow statements. The SLN Function[1] will calculate the depreciation of an asset on a straight-line basis for one period. In financial modeling, the SLN function helps calculate the straight line depreciation of a fixed asset when building a budget. … [Read more...]