Category: Bookkeeping

Separation of duties (SoD), also referred to as segregation of duties, is the principle that no user should be given total control over sensitive systems, processes, or activities. For example, one person is not able to complete a task without another person who acts as a check, the 7 best business debt management companies for… Continue reading Why is Segregation of Duties important?

Relevant tests – Vouching the cost of assets to purchase invoices and checking depreciation rates and calculations. Rights and obligations – means that the entity has a legal title or controls the rights to an asset or has an obligation to repay a liability. Relevant test – select a sample of customer orders and check to dispatch notes and… Continue reading What Are the Audit Assertions? Definition, Types, And Explanation

Depending on the industry, a company could have multiple sources of income besides revenue and various types of expenses. Some of those income sources or costs could be listed as separate line items on the income statement. Net income is the profit that remains after all expenses and costs have been subtracted from revenue. Net… Continue reading Net Income vs Gross Income: What’s the Difference?

The results of all financial transactions that occur during an accounting period are summarized in the balance sheet, income statement, and cash flow statement. The financial statements of most companies are audited annually by an external CPA firm. It may be handled by a bookkeeper or an accountant at a small firm, or by sizable finance departments with… Continue reading How to Know When to Move from Public Accounting to Industry Accounting

When applied beyond accounting, Sage Intacct isn’t the most capable ERP system, as it lacks some of the feature-rich applications others have for use cases like sales, customer support, and logistics. ERP streamlines and integrates all of a company’s data into one database system that acts as the single source of truth, so data can… Continue reading Enterprise Resource Planning ERP: Meaning, Components, and Examples

The double-entry practice ensures that the accounting equation always remains balanced, meaning that the left side value of the equation will always match the right side value. Essentially, the representation equates all uses of capital (assets) to all sources of capital, where debt capital leads to liabilities and equity capital leads to shareholders’ equity. This… Continue reading Accounting equation Wikipedia

The simplest way to understand revenue vs income is by understanding the total summation of your expenses between each term. Effectively managing costs against revenues will determine whether a company will have positive earnings (a profit) or a loss. A company’s sales indicate the performance of its core business operations, while its revenue may be… Continue reading Revenue vs Income Difference, Example, Statement

Teams in England, in particular, have issued debentures to help fund construction, and the holders receive tickets to games or part ownership of the team. Every once in a while, a company will go out of business, and its assets will be liquidated. In this case, there is usually an order to which lenders get… Continue reading What Is a Debenture, and How Does It Work?

This helps businesses understand their current financial health and make better business decisions. Additionally, having an updated set of policies helps business owners make strategic decisions related to pricing, product sales, and operations. Regularly reviewing the bookkeeping policies ensures that any changes or adjustments can be made quickly in order to best meet the needs… Continue reading Bookkeeping for Etsy Sellers An Ultimate Guide

And for self-employed attorneys or accountants, FreshBooks includes a retainer feature that makes it easy to bill your clients a retainer fee. Your business tax amount is determined by the net income on the Schedule C you complete each year. That Schedule C income is included in your personal 1040 tax return and is taxed… Continue reading Sole Proprietorship: What It Is, Pros & Cons, Examples, Differences From an LLC