Source Documents

What Are Source Documents in Accounting? To complete the accounting records, a bookkeeper needs to have source documents to work from. These documents show the financial effects of transactions. Types of Source Documents This section provides an overview and description of the source documents themselves. They come in many shapes and sizes, but they can be split into three categories. Sales Docume…

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Which Is Better: Master’s in Accounting or ACCA?

While your enthusiasm for numbers and accounting might have inspired you to pursue a degree in commerce or economics, it’s a challenge to figure out what your next step in higher education may be. Given the many options available, one of the dilemmas that students of accounting or finance face is whether to pursue ACCA or a master’s degree in accounting. This articles delves into the differences,…

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Cash-Basis vs Accrual Accounting

Choosing Between Cash Basis and Accrual Accounting Accounting is an essential aspect of any business. There are three main methods of accounting: Cash basis Accrual accounting Modified cash basis Each method has its pros and cons when applied. The two accounting methods that have a major difference in their implementation are cash basis accounting and accrual accounting. The fundamental difference…

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Statement of Affairs

Statement of Affairs: Definition Similar to a balance sheet, a statement of affairs is a statement of assets and liabilities that is prepared to find out capital under the single entry system. When calculating profit or loss using this method, it is worth considering both fresh capital (or additional capital) and drawings. Fresh Capital or Additional Capital If fresh or additional capital is intro…

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Fundamentals of Financial Accounting for Dummies 2019

When starting a business, whether online or traditional, it is essential to learn about the fundamentals of financial accounting. You can’t expect your business to grow if you don’t know how to read and interpret the numbers and metrics that underpin it. You might argue: There are many automated tools to help me keep track of my company’s performance and sales, so why should I learn about financia…

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Single Entry System in Accounting

What Is the Single Entry System? The single entry system is a bookkeeping system in which, sometimes, both aspects of a transaction are recorded, whereas other times, only one aspect of a transaction is recorded. In certain cases, the complete transaction is not recorded. Introduction to the Single Entry System in Accounting In small businesses, a major problem arises in that due to shortages of t…

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Difference Between Finance and Accounting

Finance and accounting might sound like similar words, but they are actually two different terms. Both finance and accounting offer interesting career opportunities for youngsters and university graduates. If you’re an undergraduate student, or if you’re simply curious to know what these terms mean, then this article will help you expand your knowledge. In particular, we will examine the differenc…

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Limitations of Financial Accounting

What Is Financial Accounting? Financial accounting, which is historical in nature, is mainly concerned with the recording of day-to-day business transactions. It is simply a post-mortem of past events. Under financial accounting, business transactions are first recorded in the books of original entry. In turn, they are classified into the ledger and finally summarized by preparing a trial balance….

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Advantages and Disadvantages of Double Entry Bookkeeping

Advantages of Double Entry Bookkeeping The advantages of double entry bookkeeping include the following: Each transaction is recorded with its twofold aspects, so the total of one side must be equal to the total of the other side. This helps to improve the accuracy of records. Maximum information can be obtained by the owner of the business and other interested parties. Each transaction of revenue…

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Accounting Concepts and Conventions

Accounting Concepts Accounting concepts are the basic assumptions or ideas upon which the science of accounting is based. These are the fundamentals of accounting practice. These include: Separate Entity Concept Going Concern Concept Money Measurement Concept Cost Concept Dual Aspect Concept Accounting Period Concept Matching Concept Realization Concept Accounting Conventions Accounting convention…

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