Revenues are an income account in a company’s financial statements. It also indirectly relates to equity due to its impact on retained earnings or accumulated profits. Companies that offer credit sales will also incur account receivable balances from sales along with any cash collected. These https://kelleysbookkeeping.com/ include companies that offer products and services, contractors, contingent […]

Companies operating in the United States rely on the guidelines established in the generally accepted accounting principles (GAAP). Under GAAP, a contingent liability is defined as any potential future loss that depends on a “triggering event” to turn into an actual expense. From a journal entry perspective, restatement of a previously reported income statement balance […]

At times, companies accrue gains or losses due to fluctuations in asset value, which wouldn’t be recognized under net income. These various items are then totaled into a comprehensive income total at the bottom of the report. A positive balance in this https://kelleysbookkeeping.com/ report will increase shareholders’ equity, while a negative balance will reduce it; […]

This type of error can only be found by going through the trial balance sheet account by account. A trial balance includes a list of all general ledger account totals. Each account should include an account number, description of the account, and its final debit/credit balance. In addition, it should state the final date of […]

That’s because gross earnings refer to the overall amount brought in and doesn’t take into account anything that needed to be spent along the way or fees that have to be deducted. In finance and accounting, there are many items in the financial statements that are referred to as gross. If, for example, you earn  […]