This journal would be used if your business has paid or will be paying a contractor to repair something. The above journal uses the Other Income account to show it is not part of the normal day to day activity…
The company then will depreciate these assets over the five-year period to account for their cost. The depreciation expense is moved to the income statement where it’s deducted from gross profit. These assets are considered fixed, tangible assets because they…
With Essentials, you can track your unpaid bills easily and pay them directly within QuickBooks. You just need to select the bills you want to pay from the Pay Bills window, place a checkmark next to the bills, and then…
Understanding the difference between price and cost can help business owners make more informed pricing decisions and increase their profits. Price and cost are two fundamental concepts that play critical roles in business and the economy. Price refers to the…
There are four key types of contra accounts—contra asset, contra liability, contra equity, and contra revenue. Contra asset accounts include allowance for doubtful accounts and the accumulated depreciation. Contra asset accounts are recorded with a credit balance that decreases the…
This is posted to the Cash T-account on the credit side beneath the January 18 transaction. This is placed on the debit side of the Salaries Expense T-account. In the last column of the Cash ledger account is the running…
In this article, we go into a bit more detail describing each type of balance sheet item. Businesses prepare different kinds of reports at the end of each accounting year. These financial reports help the business to know how it…
Purchase returns and allowances do not appear on the balance sheet as they are not liabilities. Instead, they must be recorded in a type of account known as a contra revenue account. A cash allowance offered by a dealership is…
With clear procedures in place, you can be proactive about collecting payments. Create a process where you’re prompted to contact a client on the first day a payment is late, so they’re aware of their payment terms and any overdue…
QuickBooks Online (QBO) is a pivotal tool reshaping the financial management process for businesses. This cloud-based accounting solution goes beyond traditional methods, providing a sophisticated platform to navigate the intricacies of fiscal responsibilities. In this guide, we’ll get into the…
