Categoría: Bookkeeping

Using accounting software simplifies this process, ensuring accuracy and keeping the equation balanced. To analyze financial health, businesses must know the accounting equation and how it applies to their records. Simply subtracting the company’s liabilities from its assets provides a clear picture of equity, supporting better financial decision-making. This equation is essential for small businesses to maintain accurate financial records and ensure long-term viability. A balance sheet, a key financial statement, is a direct reflection of the accounting equation. What…

As shown in the income statement below, new income from a grant with donor restrictions is recorded and displayed in the With Donor Restrictions column. Accounting software designed for nonprofits can simplify grant cost allocations. Many platforms include features like time tracking, expense categorization, and customizable reporting tools, making it easier to allocate costs accurately and generate transparent financial reports. Conditional grants can be powerful tools for nonprofit organizations when used strategically. They provide targeted support for specific initiatives, but…

You should consider our materials to be an introduction to selected accounting and bookkeeping topics (with complexities likely omitted). We focus on financial statement reporting and do not discuss how that differs from income tax reporting. Therefore, you should always consult with accounting and tax professionals for assistance with your help to obtain current tax year information individual specific circumstances. Where to look for liabilities in reports? This process helps in tailoring the chart of accounts to fit the specific…

When the company disburses the funds to its shareholders, the Dividends Payable account is debited, and the Cash account is credited. This transaction reflects the outflow of cash and the settlement of the liability. Accurate recording of these entries is essential to maintain the integrity of financial statements. It’s not always good news for investors when companies pay dividends out of retained earnings. Recording Dividends in Financial Statements The investor can prevent this if their broker permits a do not…