Accounting is recording, classifying, and summarizing financial transactions to provide helpful information in business decisions. Italian mathematician Luca Pacioli laid the foundation for modern accounting in 1494 when he published a book describing double-entry bookkeeping. Accounting has evolved since then, but the basic concepts remain the same. In this blog post, we’ll take a closer… Continue reading What Is Accounting?
Category: Accounting Basics Series
What Is the FASB?
The FASB is one organization that provides standardized guidelines for financial reporting. The Financial Accounting Standards Board’s (FASB) mission is to establish and improve financial accounting and reporting standards for the guidance and education of the public, including issuers, auditors, and users of financial information. Accounting standards are essential to the efficient functioning of the… Continue reading What Is the FASB?
What Are The Parts Of An Income Statement?
The line reporting sales revenue is the first and most important part of an income statement. Businesses need to be consistent from year to year regarding when they record sales. For some businesses, the timing of recording sales revenue is a significant problem, mainly when the final acceptance by the customer depends on performance tests… Continue reading What Are The Parts Of An Income Statement?
What Every Entrepreneur Needs to Know About Accounting – Investing and Financing Activities
As a business owner, you need to know the different accounting activities under investing and financing. These activities include secured transactions, loans, and equity investments. Keep reading to learn more about these essential concepts and how they can impact your business. Investing Activities Investing activities are those that involve the use of a company’s cash… Continue reading What Every Entrepreneur Needs to Know About Accounting – Investing and Financing Activities
Depreciation – Critical Elements You Need To Know
The idea of depreciation is a strange one to grasp. It’s an expense you don’t see but plays into your business. Like the plot twists in Lost, this unknown factor can be frustrating and make no sense until we understand its purpose! As a business owner, it’s essential to have a basic understanding of accounting… Continue reading Depreciation – Critical Elements You Need To Know
Prepaid Expenses – Critical Things You Need To Know
The price you’ll pay for business growth lags behind the effect of cash flow. Managers and investors need to understand that increasing sales without expanding their accounts receivable isn’t a realistic scenario for revenue growth. In the real world, enjoying increased earnings without incurring additional costs is impossible. What are prepaid expenses, and why are… Continue reading Prepaid Expenses – Critical Things You Need To Know
Accounts Receivable Management – Critical Things You Need To Know
Accounts Receivable Management One of the more complicated accounting items is accounts receivable; in most businesses, these make up a large portion of assets. In other words, they cause cash flow delays in a business through the delayed payment of sales and expenses. As an example for calculating them, imagine that your company offers 30-day… Continue reading Accounts Receivable Management – Critical Things You Need To Know
What’s A Balance Sheet?
Although cash flows and income statements are different, they have unique qualities. The income statement reports profits in quantifiable terms while categorizing them under three headings: revenues, expenses, and earnings per share (EPS). On the other hand, the statement of cash flows provides a more detailed overview of how changes in liquidity affect your company’s… Continue reading What’s A Balance Sheet?
Gains and Losses
What are accounting gains and losses, and why do they matter to businesses and individuals? Accounting gains and losses are crucial to any business or individual financial dealings. These are the profits or losses resulting from a financial transaction. For businesses, accounting gains and losses refer to the difference between revenues and expenses during a… Continue reading Gains and Losses
Sales Accounting – What You Absolutely Need To Know
Basic Sales Accounting All business starts with sales – and recording those sales transactions is known as sales accounting. We will explore a few elements of sales accounting that entrepreneurs need to know. Sales accounting is the process of recording and reporting sales transactions. Sales accounting is a vital part of any successful business. At… Continue reading Sales Accounting – What You Absolutely Need To Know