Retained Earnings Explained

Whenever a business takes in money, the amount garnered usually gets divided for different allocations. A part of it goes into company expenses, employee salary, equipment updates, inventory, etc. Likewise, a portion of the money goes to the people who invested in the business, the shareholders, in the form of Read more…

Accrual to Cash

Organizations regulate their financial account statements using either of two accounting bases: cash or accrual. Most businesses use the accrual basis of accounting to comply with Generally Accepted Accounting Principles (GAAP). It became the standard because of its ability to show a more accurate, real-time account of a business’s performance. Read more…

Adjusted Trial Balance

Accounting cycles are vital in recording a company’s financial interactions and their resulting financial standing. It begins from the first transaction up to the final balancing. The most important part of this cycle is the trial balance. A trial balance is a document that shows a business’s accounting information. It Read more…

Cash Over and Short

Money is at the heart of all businesses. However, it is often difficult to effectively manage that money, especially if you take money from customers and give them change. This can lead to several problems, not least of all a cash over and short issue. A cash-over and short account Read more…

Contra Asset Account

Contra asset accounts are, as the name implies, accounts that are contrary to popular belief. Contra asset accounts have a credit balance as compared to a debit balance that most other types of accounts have. Before we start talking about the finer details, it’s important to know what is a Read more…

Control Account

What is a Control Account? A control account in accounting is defined as a summary-level account in the general ledger. The account contains the sum total of individual transactions from subsidiary ledger accounts. Control accounts are typically used to summarize the accounts payable and accounts receivable ledgers. Those ledgers usually Read more…

General Ledger Account

Your accountants need to process and record several business transactions in your financial books of accounts according to a system known as double-entry bookkeeping. This means each transaction is recorded in two accounts when written into the books. One account decreases as the other increases. This system helps you track Read more…