Category: Bookkeeping

Hotels and airlines often receive advance payments for room bookings or flight reservations. Software-as-a-Service (SaaS) companies frequently receive prepayments for annual subscriptions. Magazine or software subscriptions often require upfront payment for future access to content or services. Are unearned fees debit or credit? These Fees occur when customers pay for goods or services in advance, […]

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The beginning balance is carried over from the previous period, while net income and dividends reflect the company’s financial activity during the reporting period. If the company experiences a net loss, the retained earnings will decrease as the loss is deducted from the existing balance. The ending balance of retained earnings combines the beginning balance, […]

Materiality refers to the significance of an amount, transaction, or discrepancy in financial statements. Something is considered material if its omission or error could influence the economic decisions of those who rely on the financial statements. A business must disclose or record every element that could possibly affect an investor’s choice. What is the Materiality […]

The depreciation expense is scheduled over the number of years corresponding to the useful life of the respective fixed asset (PP&E). The method you choose should align with your business’s specific needs, asset types, and financial goals. While you now have a solid foundation, the details of depreciation and how it affects taxes and financial […]

The financial reports or information resulting from the accounting process that is transferred to the users in two forms-internal and external. The salaries of the employees indirectly depend upon the profits of the enterprise. The amount of bonus to be granted to employees is also fixed after analysing the financial statements. Internal users of Accounting […]

In this tragic case, the crew set the aircraft to descend at 3,300 feet per minute instead of the 3.3 degree angle they meant to enter. Another cause of transposition errors is the use of ambiguous characters or symbols. For example, the numbers 6 and 9, or the letters b and d, can easily be […]

This means that recording a transaction in the period in which they occurred is paramount. Being able to show activities for different financial periods is crucial too. Therefore, starting the year with temporary accounts at zero balance is important. In accounting, there are multiple types of accounts classified as assets, liabilities, equity, revenues or expenses. […]

See this link for detailed explanation of present value of annuity concepts. FVORD represents the total amount paid against the loan with interest. C) Calculate the total amount of interest Andy will have paid on the mortgage over the 30 years. It is worth noting that this formula was first introduced in Section 3.3. The net […]

Also worth considering is whether the exam itself is scheduled online or in person and how often it’s administered. The cost of the exam—including the enrollment fee, course materials including workbooks, and any administrative fees—should also be taken into account. Evaluate whether you currently have the knowledge to be an efficient bookkeeper or the formal […]