We are going to talk about adjusting entries. Specifically in this segment we'll talk about two adjusting entry situations, prepaids and supplies. So let's get right into the material by asking the obvious quesiton what is an adjusting entry. And adjusting entry is merely a journal entry that is made at the end of the month.
Revenue recognition Cash Basis or Accrual Basis We will be comparing and contrasting the cash basis accounting versus accrual basis accounting. What are these accounting systems? These are two different types of accounting methods by which a company can maintain their records. How does a company know which one of these methods to use? Well […]
I am going to show you how to remember the rules of debits and credit, so you will know how to prepare financial statements using these rules. So to help you out I have put some information behind me here on the whiteboard.
Balance sheet is nothing but another financial document that we accomplished prepared to provide a user with more information about the financial potition of a company. you can look up your textbooks for a more formal definition.
Let's talk about why do we close the books. The best analogy is one that I read years back in a textbook it was a sports analogy and I'm going to paraphrase that to help us understand this closing process a little better. Let's assume that the Yankees and the Orioles two baseball professional teams are playing each other.