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Adjusting Journal Entries
What are adjusting journal entries? The matching principle states expenses must be matched with the revenue generated during the period. The purpose of adjusting entries is to ensure that all revenue and
Learn MoreCreating Financial Statements
The four basic financial statements are the income statement, the statement of retained earnings, the balance sheet and the statement of cash flows. Due to the complexity of the statement of cash flows,
Learn MoreThe Statement of Cash Flow
It could be argued that the statement of cash flow is the most important of all the financial statements. It is also the least understood. Understanding the purpose of the statement of cash flow is the
Learn MoreClosing Entries Using Income Summary
I imagine some of you are starting to wonder if there is an end to the types of journal entries in the accounting cycle! So far we have reviewed day-to-day journal entries and adjusting journal entries.
Learn MoreCash: Bank Reconciliations
For many students, bank reconciliations are a difficult topic because most people don’t do them anymore. Twenty years ago, before debit cards and online banking, there was only one way to keep track
Learn MoreDirect Write-off and Allowance Methods for Dealing with Bad Debt
Loaning money contains risk. Every time a business extends payment terms to a customer, that business is taking on risk. Not every customer will pay on time, some may not pay at all. When a customer
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