April 03, 2020
Charles Lutwidge
Foreign Currency Translation
To begin with, we would like to tell you why firms translate. First, it facilitates the preparation of consolidated financial statements that allow users to see the performance of a multinational company’s total operations, both domestic and foreign. Foreign currency...
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April 02, 2020
Charles Lutwidge
Why should you pay attention to the retained earnings line on the balance sheet?
How do you get a snapshot of your business’s financial data at any given point in time? Your balance sheet. It details your assets, liabilities and the value of your shareholders’ equity. It shows the overall financial health of your...
February 17, 2020
Charles Lutwidge
What is a Cash Flow Statement?
The cash flow statement is a report that gives the movement of money (cash, cash equitable, marketable securities, bank balance) during the period under consideration. It shows the amount and various sources of money generated and used by a business...
January 15, 2020
Charles Lutwidge
Adjusting Entries
An adjusting entry is a type of accounting entry that is crucial to closing the accounting period. According to the accrual method of accounting, a company must adjust its initial trial balance as the accrual period closes. An adjusting entry...
January 15, 2020
Charles Lutwidge
Purchases Journal
According to fundamental accounting principles, the definition of a purchases journal is a special journal normally used by a business to record all purchases on credit. The ones that are done on account will impact accounts payable. Thinking of the...
January 08, 2020
Charles Lutwidge
Balancing off Accounts
One of the steps in the accounting cycle is balancing off the accounts. You can do this after all the financial data has been posted to the ledger accounts. What does it mean? Balancing off means matching figures of debits...
January 08, 2020
Charles Lutwidge
Cash Disbursement Journal
Cash Disbursement Journal is a special journal used to record all payments of cash, also called Cash Payment Journal. This is a journal that we could use if we were to set up the accounting process by hand rather than...
December 17, 2019
Charles Lutwidge
Posting in Accounting
Businesses around the world make millions of payments every day. Every business that conducts business as a legal entity makes a large number of financial transactions that it has to keep under control. Therefore, the law requires all state and...
