Accountants use a trial balance to test the equality of their debits and credits. A trial balance is a listing of the ledger accounts and their debit or credit balances to determine that debits equal credits in the recording process. Preparing and adjusting trial balances aid in the preparation of accurate financial statements. Although you …
An offset involves assuming an opposite position in relation to an original opening position in the securities markets. For example, if you are long 100 shares of XYZ, selling 100 shares of XYZ would be the offsetting position. An offsetting position can also be generated through hedging instruments, such as futures or options. In some […]
Petty cash books have both debit and credit side and it records all the receipts on the debit side and all payments on the credit side just like a general cash book. Under imprest, petty cash book system petty cashier submits a statement of expenditure to the head cashier at an interval of a certain […]
Notes can be used to track interaction with specific customers or companies and to provide background information that may be useful for people in other departments. This can create situations where there is necessary information but no convenient place to put it. In these cases, an accounting note is used to provide the information in […]
Both the Dividends account and the Drawing account are temporary balance sheet accounts since they are closed at the end of each year in order for the accounts to begin the following year with $0 balances. The company also has an option to directly give effect for dividends declared in the retained earnings. Large stock […]
Usually, for companies to calculate the profit or the loss for an event, they will use their unique set of rules and policies. For example, some organizations may account for their own wages or depreciate capital assets before calculating net loss. The matching principle requires that revenues and expenses should be matched and included in …