Category: Bookkeeping

These two factors are accounted for by isolating two variances for materials—a price variance and a usage variance. The expense recognition principle also applies to manufacturing overhead costs. The manufacturing overhead is an expense of production, even though the company… Read More

Sales returns refer to products that are returned by customers for various reasons, such as being defective or not meeting expectations. These returns can have a significant impact on credit sales since they result in a decrease in net sales… Read More

A unique set of information is assigned when opening an account at a financial institution. Checking account numbers are used by payroll processing agencies to create a direct payment system for workers. Account numbers are linked to the majority of… Read More

Your bank will initiate an investigation to resolve the issue and protect your account from any potential harm. Leaving sensitive information exposed, such as writing down account numbers on easily accessible surfaces, increases the payroll risk of unauthorized access. The… Read More

An investor might look at the volatility (beta) of a company’s financial results to determine whether a stock’s cost is justified by its potential return. Cost of capital is a calculation of the minimum return that would be necessary in… Read More

Effective marketing strategies for accounting firms include optimizing your website for SEO, leveraging social media, hosting webinars, publishing blog posts, and implementing a referral program. Participating in local networking events, offering seasonal promotions, and creating educational resources can also attract… Read More

Reconciling the accounts is a particularly important activity for businesses and individuals because it is an opportunity to check for fraudulent activity and to prevent financial statement errors. Reconciliation is typically done at regular intervals, such as monthly or quarterly,… Read More

Do this at the end of the accounting period, which can be monthly, quarterly, or annually, depending on the company. Known as the “trial balance,” this provides insight into the financial health of your company and can help you identify… Read More

Adjusting entries are prepared to update the accounts before they are summarized in the financial statements. Some errors could exist even if debits are equal to credits, such as double posting or failure to record a transaction. Also known as… Read More