Escrow deposits are common in the banking industry, with accounting procedures separating escrow funds from other money. Custodial accounting involves reconciliations and a fiduciary responsibility to protect funds from losses. Cash disbursement and cash receipt journals are used, and escrow accounts issue written statements to each party. Trust accounting records and financial transaction reports related […]
Accounting data is financial documentation used to prepare financial statements and audited for accuracy. It can be electronic or paper-based and must be kept for a set period of time. Discrepancies may indicate errors or wrongdoing. Accounting data is a body of financial documentation that supports an accounting statement. People use such data to prepare […]
Management accounting systems track costs of production, including traditional cost accounting, adjusted accounting, performance accounting, and transfer pricing. Failure to follow a system can result in overpriced products and lower gross margins. Lean accounting focuses on reducing costs by eliminating waste, while performance accounting identifies constraints to increase production volume. Transfer pricing costs goods as […]
Financial accounting problems can arise from incomplete financial documents, inconsistent recording of transactions, and depreciation methods. However, double-entry bookkeeping helps prevent math errors from causing major problems. There are several issues that can lead to financial accounting problems. These include the elements of financial performance that a company tracks, the basis on which it records […]
Government accounting in the US involves specific accounting functions for public sector entities. Federal entities follow guidelines from FASAB, while state and local governments follow GASB. Fund accounting, budgets, appropriations, and levies are used to record financial information. Government accounting is a broad-based term that describes the specific accounting functions of public sector entities in […]
The ACCA offers a CAT designation that covers finance and accounting topics and prepares candidates for entry-level and management jobs. To become a certified accounting technician, one must pass nine exams, complete an experience requirement and ethics module, and have at least one year of experience. Technical schools or colleges offer programs that correspond to […]
Public sector accounting tracks government financial transactions, with a focus on tax revenues and project expenditures. It uses a fund pool to restrict unauthorized spending and establish ethical standards. An international standard helps smaller nations improve their infrastructure and demonstrate creditworthiness. Public sector accounting is the process used by government agencies and municipalities to record […]
Accounting ethics require accountants to behave ethically and consistently, with due diligence, avoiding conflicts of interest, and reporting illegal activities. Ethical misconduct can harm clients, society, and investors. Accounting schools teach ethics to promote high standards, but some accountants and organizations still cross ethical lines. Accounting ethics is a field of professional ethics that refers […]
Investment accounting involves managing financial accounts for investments, with regulations varying by region. It’s important to ensure accuracy and legality, and certified investment accountants can help with strategic management. New investors can use books, software, or simulators to learn and plan before investing. Investment accounting is the analysis and management of financial accounts involved in […]
An accounting clerk manages a specific type of account and may perform general accounting tasks. Education and attention to detail are necessary, and some employers require an associate’s degree. On-the-job training is common, and industry certification can help advance to specialized roles. Accuracy, multitasking, and critical thinking skills are essential. An accounting clerk usually holds […]
Reserve accounting is the calculation, use, and accounting of reserves, which include capital and income reserves. Reserves are any portion of shareholders’ equity except basic share capital and are used to keep a business going during tough times. Provisions are not included in reserve accounting, and reserves should be saved for a rainy day. In […]
Accounting qualifications vary based on the size of the organization, with larger companies requiring more rigorous qualifications. Basic qualifications include math skills, honesty, and computer skills. Duties range from tracking receipts to preparing financial statements. Certification may be required, and accountants may be promoted to supervisory positions or start their own businesses. The job carries […]
Reserve accounting refers to how reserves are calculated, used, and accounted for. It includes capital and income reserves, shareholder contributions, and retained earnings. Reserves are like extras or surpluses of earnings and should be saved for a rainy day. In finance, reserve accounting refers to how reserves are calculated, used, and most importantly, accounted for. […]
Financial accounting systems can be manual or software-based, and can be classified by organization type and financial organization method. They handle cash management, payroll, taxes, and expenses, and must be matched to the needs of the user. Different types of financial accounting systems are used for different purposes, and software programs often have additional features […]
Pushdown accounting is used in takeovers, where the cost of acquiring a company is marked on the books of the acquired company instead of the acquiring company. This method is legal under GAAP and can be beneficial for tax purposes and determining profitability, but can also result in losses during earnings reporting. Pushdown accounting is […]
An accounting supervisor manages accounting functions, oversees staff, develops procedures, and prepares financial reports. Communication skills are vital to success, as is knowledge of economics and accounting software. The supervisor must maintain budget constraints and keep a positive environment. An accounting supervisor performs a variety of accounting functions while also supervising junior accounting personnel and […]
Cost and management accounting is a system used by managers for internal financial purposes, focusing on efficient resource use. Cost accounting captures data on operating expenses, while management accounting uses it for decision-making and strategic planning. Data collection includes labor and equipment tracking, and reports help managers align costs with production results to minimize waste. […]
Nonprofit accounting software helps manage financial affairs, record donations, pay bills, generate financial reports, and process payroll. It simplifies record-keeping, ensures compliance with laws, and is cheaper than hiring professionals. It also streamlines fundraising activities and integrates with the web. Nonprofit accounting software refers to web-based or desktop software that nonprofit organizations can use to […]
Deferred compensation is an agreement between an employer and employee to pay at a later date. It is recorded as an adjustment to temporary accounts using accrued expense techniques, recognizing the expense as a liability for the current accounting period. The US IRS requires regular payroll tax codes when accounting for deferred compensation. Deferred compensation […]
Cost accounting evaluates overhead costs for businesses, helping managers determine spending and identify trends in production costs. It is also useful in product development and marketing strategies, providing data for business decisions. Cost accounting is an approach to evaluating the overhead costs associated with doing business. Often based on standard accounting practices, it is one […]
