Free basic accounting tutorials you need to learn in order to do bookkeeping.
Adjusting Entries is a way to adjust or correct the balances of financial statements. For instance, the company uses the expense method of accounting for stationery and supplies accounts. Moreover, rentals and insurance. Normally, if the company uses the expense method, it records all the purchases of stationery and supplies as an expense. As well …
Bonds payable is a debt instrument. The issuance of bonds has an issuer, the debtor, and a holder, the creditor. The bonds certificate represents a promise to pay the sum of money at the maturity date. Moreover, the periodic interest is on the maturity amount (face value) at a specific rate. When the amount of …
Warranty is a liability account. Warranty is a permanent account meaning at the end of the reporting period, the liability is carried over to the next period. It is a promise of a seller to a buyer to make good on a deficiency of quantity, quality, or performance in a product. This is a way …
This content will teach you how to record wasting assets and their depletion expense. Similar to depreciation and amortization, depletion is an expense account. It is a deduction to gross income. Some companies selling the resources while extracting record it as an inventory. This way of recording is acceptable. If this is the case, inventory …
This content aims to introduce you to change in accounting estimate. Several transactions are considered accounting estimate. Maybe you are wondering why it’s just an estimate. Moreover, maybe you have this question in your thoughts about how financial statements are reliable if some transactions are based on estimates. It is a good question to wonder. …
This content will teach you how bookkeepers/accountants record property, plant, and equipment transactions. The goal is to let you understand how the property, plant, and equipment presented in the financial statements turn out. This content provides illustrations of all the modes of acquisition. Especially the order of priority in determining the cost of PPE assets …
10 Generally Accepted Accounting Principles (GAAP) are guidelines used in financial reporting. These are the standards, methods, and legalities of business in accounting. 10 GAAP Principles are important in accounting. It assures us of the reliability of financial statements. 1.) Principle of Regularity Talks about the principles that accountants should use systematic policies. Otherwise, rules …
Depreciation is the cost allocation of a long-term asset. Long-term assets – used in more than one reporting period. It’s like your toothpaste, bar soap, and condiments. It’s good for more than one usage so you allocate the cost probably good for the whole month. Unlike the meals we eat, it is good for a …
Learning accountancy takes a lot of time. That is why I write these 10 basic accounting terms. These are the most important terms in accounting you need to know. 1.) Accounting Equation in Basic Accounting Terms Accounting Equation – is the accounting identity. In the accounting equation, the asset should be equal to liabilities and …