Category: Bookkeeping

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The result is a new retained earnings balance at the end of the month. Closing entries move the credit balances of revenue accounts into Retained Earnings and cause that account to increase. Closing entries also transfer the debit balances of expense accounts into Retained Earnings, causing it to decrease. When you purchase an asset, there […]

Because of this, they require specific accounting methods and benchmarks that wouldn’t apply to, say, a retail store. At first, restaurant accounting can seem like a daunting and time-consuming prospect. However, if you invest a little bit of time researching and planning how best to set up and manage your restaurant accounting, it will become […]

For example, if an electronics manufacturer purchases microchips for its products, the direct cost of a unit would include the cost of each microchip. Figure 6.8 illustrates how the costs in each pool are allocated to each product in a different proportion. You may find yourself in a situation where you determine your production costs […]

For instance, if you prepare a yearly balance sheet, the current year’s opening balance of retained earnings would be the previous year’s closing balance of the retained earnings account. Cash flow refers to the inflows or increases as well as the outflows or reductions in cash. Cash dividends impact the financing activities section of the […]

When you receive the full payment from the customer, debit $50 to the suspense account. In this case, the accountant will pass the initial entry in the suspense account till he identifies the correct open invoice. For suspense account journal entries, open a suspense account in your general ledger. In accounting for small business, most […]

They are issued regardless of immigration status, because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code. ITINs do not serve any purpose other than federal tax reporting. The Individual Tax Identification Number, or ITIN, allows taxpayers who don’t have a Social Security Number (SSN) to […]

This definition is based on the usage that does not specify any particular item. You can figure out the value of your assets by looking not at the historical cost, but at the original cost of the asset minus any depreciation in value. In theory, if Bank of America liquidated all of its assets and […]

It is a list of the company’s raw materials that cannot be broken down into components. The direct materials for a bakery’s products will likely be flour, sugar, eggs, milk, vegetable oil, spices, and other ingredients listed in the bakery’s recipes. We now have all the numbers needed to calculate the direct material used in […]

Indirect tax, or taxes applied to all products equally, includes things like GST and VAT. Our mission is to empower readers with the most factual and reliable financial information possible to help them make informed decisions for their individual needs. At Finance Strategists, we partner with financial experts to ensure the accuracy of our financial […]