It is the place where a business chronologically records its transactions for the first time. A journal can be either physical (in the form of a book or diary), or digital (stored as spreadsheets, or data in accounting software). It specifies the date of each transaction, the accounts credited or debited, and the amount involved. You want to be at your best when you’re looking at figures that explain your business’s profitability […]

You can file information in your accounting software or another cloud-based program. Categorize documents like invoices, cash flow statements, income statements, bank statements, and receipts. Each one of these is designed to track specific types of business transactions. For example, there’s cash basis accounting and accrual basis accounting. You need to decide which accounting method you will use for your company. Either way, it’s critical to have an accurate balance […]

The other company recognizes its prepaid amount as an expense over time at the same rate as the first company recognizes earned revenue. Contracts can stipulate different terms whereby no revenue may be recorded until all of the services or products have been delivered. The payments collected from the customer would remain in deferred revenue until the customer has received in full what was due according to the contract. As obligations […]