Accounting

Occupations in the financial field compose an extensive section of the corporate area. This is comprehensible since the world of business is all about generating revenue. It is normal if you are confused between similar professions in the same sector.  Accounting and economics are excellent examples of such situations. Accounting and economics are somehow relevant. … Read moreThe Relationship Between Accounting and Economics

Prepayments Prepayments are the payments you make before you get the advantages from them. For instance, rental is a prepayment as it typically has to be settled in advance. Accruals Accruals are costs that you have incurred, but you have not paid. For instance, an unpaid water bill is an accrual expenditure, since the water … Read moreIntroduction to Prepayments and Accruals

As an entrepreneur, it is a must for you to keep excellent bookkeeping records. This is because a lot of researches have proved that business with inadequate accounting documents and account books are more likely to fail. Such company also possess lesser opportunities for survival when they are compared to companies that maintain excellent accounting … Read morePractices That You Should Avoid in Bookkeeping

Some assets will last for years, for example, equipment, machines, buildings, furnishings, computers, vehicles, and parking lots. However, they are not going to last forever. When an accounting period passes by, a part of the value of these assets is depleted. On the income statement, you will record the depleted part as Depreciation Cost. Depreciation … Read moreWhat is Depreciation?

If you do not have a thorough understanding of the accounts of an organisation, you have to learn some crucial elements before you started running your business or sit for an accounting test. This is a typical topic in financial accounting (Also see Distinguishing Financial Accounting and Management Accounting). We often hear the terms payables … Read moreHow Does Accounts Payable and Accounts Receivable Differ from Each Other?

Bad Debts When someone owes you money, yet he or she is incapable of paying it, it is bad debt. Once you realise that the debts are bad, you have to remove it from the sales ledger and move them to a Bad Debts account by journal entry. Provision for Doubtful Debts Debt might not … Read moreThe Correct Way of Recording the Provision for Bad Debts