What is the Accounting Equation?

The main financial goal of a business is to maximize profits. The financial position of a business depends on the availability and structure of economic resources, which are called its assets and capital. The relationship between these two is reflect... Read more

Retained Earnings on the Balance Sheet

Retained Earnings and Accumulated DeficitWhen you look at the Profit and Loss Statement, the final number will be a Net Income or Net Loss, depending on how much money an organization has made less all the expenses, etc. Retained earnings is the net... Read more

Accounting Transaction Analysis

Businesses are involved in thousands of business activities every single day. In order to record this financial data so that eventually we can produce the financial statements, we use the accounting equation and its elements to record business activi... Read more

Contra Expense Account Explained

Definition Contra accounts are special accounts that are established to decrease the balance in another account indirectly. They preserve the identity of the primary account and provide an account to debit or credit when one does not exist. A contra... Read more

Gross vs Net Income: What is the Difference?

Income is the main indicator for assessing the economic activity of an entrepreneur (individual or legal entity). Making a profit is the goal of any business. Though gross and net both can describe income, they mean two completely different things. I... Read more

Enrolled Agent

Every business owner, whether a beginner entrepreneur or an already experienced business owner, is faced with situations that arise for the first time. At the initial stage of entrepreneurial activity, these are questions of creating a business, keep... Read more