Category Archives: Bookkeeping

Fixed assets like property, plant, and equipment are long-term assets. Depreciation expenses a portion of the cost of the asset in the year it was purchased and each year for the rest of the asset’s useful life. Accumulated depreciation allows investors and analysts to see how much of a fixed asset’s cost has been depreciated. […]

💡 Learn what processing payments looks like within Sage using an integrated payments solution. Another of these applications is Dynamics 365 Finance and Supply Chain Management (F&SCM). F&SCM is tailored to help midsize and enterprise companies manage product demand, stock, logistics, and manufacturing. Learn how ERP payment integration solutions can reduce manual work and accelerate […]

Contributed capital and dividends show how much money has been injected by shareholders into the business and how much the business has paid out to shareholders. Essentially, Accounting is all about tracking the changes to the Owner’s Equity. Some equity comes from investments into the business by the owner. In other words, this equation allows […]

Economic changes, such as slower economic growth, lower consumer spending, or recessions that result in higher unemployment, can cause an unfavorable variance. A new competitor entering the market with fresh goods and services is one way that market conditions can change. Companies may also experience a decline in revenue and sales if new technological advancements […]

Gross income is the sum of all money earned during a particular period of time. This includes money from your salary, bonuses, commissions, side hustles, and freelance earnings, or any other sort of income, such as Social Security. Depending on the context, this can also extend to income from dividend payments, interest, and capital gains. […]

The periodicity assumption requires preparing adjusting entries under the accrual basis. Without the periodicity assumption, a business would have only one time period running from its inception to its termination. Under the cash basis, we record revenues when cash is received and expenses when cash is paid. Under the accrual basis, however, we record revenues […]

The period’s cost of the asset (expense) will be reflected on the income statement as that, an expense. The deduction of that amount will reduce the balance sheet’s assets for the same amount. A financial automation software solution can do the work for you so that you can ensure nothing slips through the cracks. At […]

Account of amortization expense is to be debited, while accumulated amortization is to be credited. For instance, development costs to create new products are expensed under GAAP (in most cases) but capitalized (amortized) under IFRS. GAAP does not allow for revaluing the value of an intangible, but IFRS does. This means that GAAP changes in […]

The buyer pays back the third party, as this method is basically a loan. This finance technique offers flexibility when cash balances are low, but buyers want to avoid using a credit card because of high interest rates. The seller will initially record sales and accounts receivable at the total amount. If the customer pays […]