Accounting records are documents and materials used in the preparation of financial statements and tax documents. They must be kept for a set period of time and can be electronic or paper. GAAP procedures must be followed, and audits review the accuracy and completeness of records. Failure to maintain accurate records can result in legal […]
Mutual fund accounting is complex, involving investments, regulations, expenses, and fees. Mutual funds offer a safe investment option, with earnings coming from dividends and interest earned, less expenses. The net asset value (NAV) of a mutual fund changes daily and is used to determine the fund’s worth. Mutual fund accounting tends to be complex, involving […]
Accounting software should be intuitive, easy to install, and include basic accounting reports, tax preparation modules, and inventory controls. It should also automate invoicing, tax preparation, check printing, and employee payroll. Many programs are accessible online and can be rented annually. A good accounting software package is designed to simplify business accounting. When selecting this […]
Accounting is crucial for companies to measure their performance in terms of profits and debts. There are various accounting roles, including clerks, staff accountants, supervisors, controllers, and bookkeepers. The highest position is the controller, who sets accounting policies and oversees all other roles. A formal degree is not always necessary, but some roles require professional […]
GAAP and tax accounting have different rules and motivations, with GAAP providing more detail and a better overall picture of a company’s health. Both methods are necessary for tax filing, and larger companies with international presence may use International Financial Reporting Standards (IFRS). The main differences between generally accepted accounting principles (GAAP) and tax accounting […]
Fund accounting emphasizes accountability over profit tracking and is commonly used by non-profit organizations and government entities. Multiple general ledgers are used to track the flow of funds for each project or fund, making it easy to report activity to constituents and government agencies. Fund accounting is a type of accounting strategy that focuses more […]
Asset accounting records and reports a company’s financial information related to its balance sheet assets, which are divided into current and fixed groups. Current assets include cash, inventory, and accounts receivable, while fixed assets include intangibles, tangibles, and investments. Asset accounting values these items according to GAAP guidelines and maintains separate depreciation schedules for fixed […]
Improper record keeping, fraudulent record keeping, and poor cash flow management can lead to business failure. Regularly reviewing records and using an independent auditor can prevent financial accounting problems. The most common financial accounting problems are rarely difficult to avoid, but they are difficult to overcome once created. Improper record keeping, fraudulent record keeping and […]
Aggressive accounting involves misstatements on balance sheets to make a company appear financially stable. It can inflate financial markets and hurt investors. Regulators attempt to regulate accounting practices to make it more difficult to engage in creative accounting. Aggressive accounting is a business practice in which certain misstatements are made on balance sheets and in […]
This text explains the three types of bookkeeping jobs: starting your own business, working for an accounting firm, and teaching. To qualify, you need a degree or certificate in bookkeeping and high school credits in accounting, math, computer technology, and English. The most common source of accounting jobs is starting your own business, and working […]
Endowment accounting tracks financial transactions involving donor-restricted investment funds of a nonprofit organization, ensuring that funds are used in accordance with the donor’s wishes. Nonprofits must separate endowment funds into permanently and temporarily restricted assets and ensure proper management to maintain their tax-exempt status. Endowment accounting is the process of tracking, categorizing, and recording financial […]
Financial accounting tests are used for educational, job training, or professional certification purposes. They focus on specific areas such as accounts payable, accounts receivable, and taxes. Professional certification exams are the most intense and require a combination of education and experience. To learn about different aspects of accounting and bookkeeping, an individual uses financial accounting […]
Steps to earning an accounting degree include selecting an accredited school, qualifying for admissions, paying tuition fees, and completing coursework. A degree is required for most finance and accounting jobs, and a CPA designation is necessary for opening a private practice or working for large companies. Online schools offer flexibility, but accreditation is important. Qualifications […]
Choosing the best accounting dictionary depends on ease of use, clarity, and updates. The purpose and level of expertise also matter. Digital and paper versions are available, with digital ones being cheaper and more convenient. Good dictionaries have etymology, acronyms, clear definitions, and notes on common usage. You can generally choose the best accounting dictionary […]
Macro accounting combines measurements of economic factors like unemployment, national debt, GDP, and consumer price indices to assess a nation’s economic health. Policy analysts use this data to understand the impacts of existing policies and formulate new policies. International standards for macro accounting were established by the UN in 1953 with the System of National […]
The Three Golden Rules of Accounting are a set of principles that guide how debits and credits should be handled in the general ledger for personal, real, and nominal accounts. They are part of the Generally Accepted Accounting Principles (GAAP) and emphasize the importance of recording and classifying transactions properly. The other two GAAP principles […]
The direct method of presenting statements of cash flows shows how cash was received and used in a business, and is important to investors and bankers. It is classified into three sections: operating, investing, and financing activities, with differences between the direct and indirect methods affecting only the operating activities section. The direct method shows […]
Convertible debt accounting is the process of recording transactions related to bonds that can be converted into equity. Accurate records, disclosure of debt amounts and reasons, compliance with laws, and valid information are important. Failure to comply with laws can result in fines and damage to a company’s reputation. Convertible debt typically represents bonds issued […]
Accounting professors teach courses in finance, tax preparation, bookkeeping, managerial accounting, and auditing procedures. They assign projects and teach specialized accounting software. A master’s degree is required, and a doctorate is preferred. They start by teaching introductory financial accounting and progress to teaching courses in accounting practices for companies and government agencies. Proficiency in accounting […]
Accrual accounting is a widely used method that records income and expenses as they occur, allowing for easier assessment of a company’s financial health and accurate snapshots of its status. It also simplifies payment processing and ensures a complete record of finances. As an example of an accounting method that keeps financial accounting current, accrual […]
