Balance sheet substantiation is an important process that is typically carried out on a monthly, quarterly and year-end basis. The results help to drive the regulatory balance sheet reporting obligations of the organization. To maximize liquidity and... Read more
Vertical analysis states financial statements in a comparable common-size format (i.e., percentage form). One of the advantages of common-size analysis is that it can be used for inter-company comparison of enterprises with different sizes because al... Read more
The equity accounts include all the claims the owners have against the company. The business owner has an investment, and it may be the only investment in the firm. If the firm has taken on other investors, that is reflected here. The chart of accoun... Read more
A capital requirement is a fraction of assets that must be held as a certain kind of liability or equity . Before the 1980s, regulators typically imposed judgmental capital requirements, a bank was supposed to be "adequately capitalized," but these w... Read more
Hence, Companies use this tool to ensure that all debit balances are equal to the total of all credit balances after an accountant passes closing entries. Temporary accounts are accounts that are closed at the end of each accounting period, and inclu... Read more
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Social Roles and Social NormsThe study was based on the debate over whether fox hunting should or should not be banned. The study involved two separate sessions where the participants completed a pre-test and were assigned to the pro- or anti- huntin... Read more
Accounting vs. Billing Software: the Key Questions You Need to AskHow to Record Accounts ReceivableThese may be distinguished from notes receivable, which are debts created through formal legal instruments called promissory notes. Outstanding advance... Read more
Adjusted balance DefinitionFor example, if there were 12 general journal entries that involved cash, there should be 12 general ledger entries that involve cash. The final value for the general ledger is the amount that is included in the trial balan... Read more
Depreciation DefinitionThe journal entry for this depreciation consists of a debit to depreciation expense, which flows through to the income statement, and a credit to accumulated depreciation, which is reported on the balance sheet. Accumulated dep... Read more
