December 02, 2019
Charles Lutwidge
What is a contra revenue account and why is it important to my small business bookkeeping?
If you are a small business owner and you sell a product, you likely have instances of returns/refunds on items or you may provide reductions for items that are defective or damaged. If you provide either a product or a...
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November 27, 2019
Charles Lutwidge
Royalties in Accounting
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...
November 26, 2019
Charles Lutwidge
The Difference Between Accruals and Deferrals
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...
November 11, 2019
Charles Lutwidge
Normal Balance of Accounts: Definition and Examples
Accurate record-keeping plays a vital role in managing your finances and making informed business decisions. However, setting up and maintaining your accounting books requires a basic understanding of accounting terminology. What is a normal balance of accounts? Which account has...
September 30, 2019
Charles Lutwidge
What is Unearned Revenue in Accounting?
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...
September 09, 2019
Charles Lutwidge
What is a Retained Earnings Statement
At the end of the year, at a general meeting of shareholders of the company or thefounders of the business, a decision is made on the distribution of the company’s netprofit. Part of the financial income that has not been...
September 09, 2019
Charles Lutwidge
Retained Earnings Statement Example
The financial statements of companies are a kind of guideline for investors and an essential aspect of financing and the economy as a whole. After all, the financial condition of the largest national companies of any country is, first of...
September 09, 2019
Charles Lutwidge
Negative Retained Earnings
One of the characteristics of a market economy is the competition between businesses, and the most important financial indicator for a business is profit. The forces that stimulate growth, along with other economic indicators, show the business entity’s efficiency. Further...
