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Businesses manage their finances using either cash or accrual basis accounting. One of the most complicated concepts to understand in accounting is converting a set of accrual-based books for a cash basis tax return. Accrual accounting is the standard for more..

An error in accounting is a non-fraudulent error in double-entry bookkeeping of transactions. In most cases, it happens due to a lack of accounting knowledge or carelessness of a bookkeeper. The business should take appropriate investigating measures as soon as it..

The accounting transaction analysis is the process of translating the business activities and events that have a measurable effect on the accounting equation into the accounting language and writing it in the accounting books. This is the first stage in the accounting..

An accounting cycle is a system of actions for identifying, summarizing, and submitting reports on economic events and operations. The stages of the accounting cycle include maintaining transaction records in the ledger, drawing up a trial balance, reconciling accounts, drawing up..

Definition of General Ledger Account The general ledger (GL) is the main consolidated accounting register, which reflects data on the company’s entire financial transaction history for all bookkeeping accounts used by the company. Businesses can maintain the general ledger on paper..

The concept of “royalty” came from the Latin language, where “regalis” meant “royal”. Today, the term has nothing to do with monarchs, but it directly relates to finances, money, making a profit. Royalty is a type of monetary reward for the..

When it comes to accounting, timing is everything. To allocate revenues and expenses to the right accounting period, accountants use accruals and deferrals. This approach also helps with comparing financial statements from different periods. Accruals and deferrals follow the Matching Principle..

The accounting equation is a fiscal formula used to calculate the relationship between various economic indicators within a business. This equation is usually presented in the form of a simple breakdown of values on a balance sheet. The accountancy formula highlights..

Revenue is an increase in an enterprise’s economic benefits over a specified reporting period. Revenue may come in the form of a revenue receipt (this is money received through regular business operations), asset sales, or a decrease in liabilities. Revenue leads..