When an individual takes money out of the petty cash fund, he notes it in the petty cash ledger. The purchase can then be made for the business and any money left over can be taken back to the petty cash fund. Petty cash funds are often created by a... Read more
Post a Cash Receipts Journal to a General LedgerThis tells the reader where to go to see the details of the Total Receipts for the month. The above image is the Cash Receipts Journal for Johnson Mechanics (an example business). You will notice that I... Read more
Cash receipt — AccountingToolsAn additional posting must be made to balancing the transaction. Therefore, a credit is needed for one or more other accounts that are affected by collecting cash. The cash receipts journal is an important tool to keep t... Read more
Net Realizable Value FormulaNet Realizable Value FormulaAn accounts receivable balance is converted into cash when customers pay their outstanding invoices, but the balance must be adjusted down for clients who don’t make payment. NRV for accounts re... Read more
Overview of Key Elements of the BusinessInvesting activities include cash activities related to noncurrent assets. Financing activities include cash activities related to noncurrent liabilities and owners’ equity. The operating cash flows component o... Read more
Profitable Coaching Business: A Guide to Improving Financial Health through BookkeepingThe Three Parts of a Cash Flow StatementSince our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understandin... Read more
Hybrid Accounting MethodOne can choose to use either the accrual basis or cash basis of accounting when initially setting up the accounting system for an LLC. Under the accrual basis, revenue is recognized when earned and expenses when incurred.Who u... Read more
Cash reconciliation — AccountingToolsYou don’t need to wait on the check (especially if it goes through the mail), and you don’t need to go to the trouble of depositing the check. As a bonus, the money might even hit your account a day or two before... Read more
Cash Basis Accounting: Explain Examples, Contrast With AccrualThe cash method is simple in that the business's books are kept based on the actual flow of cash in and out of the business. Income is recorded when it's received, and expenses are reporte... Read more
Net carrying amount — AccountingToolsAn Overview of Carrying Value and Fair ValueThe fair value of an asset is usually determined by the market and agreed upon by a willing buyer and seller, and it can fluctuate often. In other words, the carrying va... Read more
