The basis of accounting mostly refers to how accounting records are kept and maintained within the company. There are two main types of accounting that the company uses. They can either include cash basis of accounting or accrual basis of accounting. Cash Basis of Accounting Cash Basis of Accounting mostly recognizes revenues when cash is …

Cash and Accrual Basis of Accounting: Definition, Explanation, and Examples Read More »

Bookkeeping and Accounting tend to be some of the most important ancillary functions of the company. It is important to recognize that bookkeeping and accountancy help the company keep a record of its transactions. Keeping this track can help users ensure that they are well aware of their profitability, which can eventually help them decide …

Is a Bookkeeper the Same As An Accountant? (All You Need To Know) Read More »

Normal Balance The normal balance is defined as the balance which would show either credit or debt when all the data from the journal is extracted. The normal balance is calculated by the accounting equation, which says that the assets of a company are equal to the sum of liabilities and shareholder’s equity. For accounts …

Accounts Payable Debit or Credit: What is a Normal Balance? Read More »

The Bank reconciliation process involves comparing internal and external bank records to ensure that all the transactions have been properly recorded. The primitive reason to do a stringent bank reconciliation process is to ensure no discrepancy between actual and recorded transactions. Two main documents are required during the bank reconciliation process. They include the internal …

What Are the 5 Steps for Bank Reconciliation? (Guidance) Read More »

Relevance and reliability are two accounting terms that occupy an important place in accounting. When it comes to the conceptual frameworks in accounting, it is impossible to ignore relevance and reliability and still give out accurate information. Accounting information is prepared for different reasons. The importance of this information to individuals and businesses cannot be …

What are Relevance and Reliability in Accounting? Read More »

Accounting reports are very vital in the running of any business. So, you may be wondering where working papers will be in the entire reporting business. Auditors and accountants prepare working papers as additional support for accounting statements. With a working paper, it becomes easy to summarize the data used by the accountant in the …

What is an Accounting Working Paper? And Why Are They Important? Read More »

Every organization performs various activities that ensure its continuity and success in the selected market niche. Accounting transactions are an integral part of business activities. But how can you differentiate accounting transactions from other forms of business transactions? Accounting transactions include every form of business transaction that directly affects the business’s financial position and statements. …

What are Accounting Transactions? (Form, Example, and More) Read More »

Accrued vacation is a vital concept in accounting for businesses. To understand accrued vacation, you may have to first realize that employee vacation is necessary for every organization. Not only does it give your hardworking workers the opportunity to unwind, but the organization also benefits so much from it. A stressed-out employee may not give …

How do you calculate Accrued Vacation? (Journal Entry Included) Read More »

Accounting practice refers to the collective procedures and practices of an entity to manage accounting needs. The accounting needs include the day-to-day accounting records as well as compliance with regulatory authorities. Accounting practice involves several types and control procedures. An entity can follow GAAP or IFRS accounting practices. Let us analyze the concept of accounting …

Accounting Practice – Fundamentals, Types, and Importance Read More »