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May01
2018
It is one of the primary responsibilities of an accountant to keep an eye on the bank balances for each bank account of the company. The balance as shown as per our books of accounts may not be the same as reflected in bank statement. This happens due to many different reasons. Hence, any difference in our books of accounts and in the bank statement must be reconciled to find and identify the differences. This article captures various terms related to bank reconciliation as well as discusses major reasons that cause difference in balances between books of accounts and bank statement. It also explains methods of bank reconciliation.
Apr25
2018
You might have often heard the word "Retained Earnings" and wondered what it means? Just like individuals save a portion of their salary to meet future contingencies, companies also do the same.Companies keep a portion of their profits aside for various purposes like paying debts, as contingency fund or to be reinvested into core business for expansion. Such savings are called "Retained Earnings" in accounting terminology.
Apr23
2018
In last blog we discussed about Accrual Basis of Accounting v/s cash basis of accounting system. We also understood concept of accrued Income and treatment of accrued income in balance sheet and P&L accounts. In this article we are going to discuss about Accrued Expenses. The concept of accrued expense is also a part of accrual basis of accounting system.
What is Accrued Expense ?
Apr16
2018
In the U.S., when a small business grows, claiming the attention of investors or goes public, its accounting departments are required to immediately stick to the Generally Accepted Accounting Principles or GAAP.
Simply put, GAAP is a common, accounting language for companies to record accounting and financial information. The sole objective of GAAP is to enable organizations to have a standardized method of treating financial and accounting data so that the interpretation, analysis, sharing and communication of financial results and reports with the external parties will be easier and made transparent.
Apr12
2018
You may also agree, the job of an accountant is not as easy as it is perceived. The accountant carries a heavy responsibility on his shoulders helping business organizations in taking the right decision based on the financial report. Hence, hiring such a personnel for the company is a tough job for the interviewer wherein he does not only analyse you on the basis of your basic accounting knowledge but also on the basis of your leadership, team management, and communication skills.
If it’s not easy to crack accounting interview, it’s not easy for an interviewer as well.
Apr09
2018
Cash Basis of Accounting System:
Cash Basis of Accounting is a system of writing books of accounts in which only cash transactions are recorded. This implies that in cash basis of accounting, revenue or expenditure is recorded only when cash is received / paid for the respective transactions. This system is generally used only by small traders who do not require to get their books of accounts audited. In this system, expenses are recorded only when cash is paid; similarly, revenues are recorded only when cash is received.
