In this note what you’d want to do is have balances grouped based on their content – accounts receivable, prepayments etc. Keep an eye out for “trade” and “other” receivables. If the balance is not directly business related as in it’s not a result of your main business activity, it’s likely to be part of “other” receivables rather than “trade”. The latter is meant purely for as the name says trade related balances that arise directly from making trade with clients. Continue reading
Author Archives: Karl
Disclosing restatements of prior year’s misstatements in the Annual Report
If for some reason it turns out there has been a misstatement in your last year Annual Report figures, it’s strongly recommended to adjust them in this year’s report. It’s obviously applicable only if the last year Annual Report wasn’t adjusted already by taking it back for restatements. Continue reading
I got services – should I account for this? How?
The accounting for receiving services doesn’t differ much from the entry made when purchasing something. You essentially still bought something, but this something isn’t an item and you shouldn’t put it into your inventory hence there’s just one place to charge it – into expenses as you got the service or split over the period the service is received (i.e. if it’s a commercial that’s shown two months in a row, the expense should be accounted 50% in one month and 50% in another month making it a prepaid expense on your balance sheet at the end of the first month). Continue reading
I bought stuff, now what?
You bought something for your own business and now you know you should account for it. You’re not running a shop in some small village like 100 years ago where you could just get cash from the till, go buy something and be done with it. No.
The way we do things is quite the opposite. I mean we still take money if we are going to pay by cash, but there’s more to it. Yes, we also pay via bank transfers, but that’s not what I’m on about. Continue reading
I made a sale, help!
Making a sale is what the business usually is about – you sell things or services to earn your living. That’s what you’re expected and supposed to do when you’re in business. Now, there’s also this thing called accounting for the sale obviously. Continue reading
Things to always do
Keeping your business going is an everyday job mostly – there are things you’ve got to do to keep it all running smoothly and to ensure you’ve got your customers happy, you’ve got your invoices paid and last, but not least have your accounting in order. If you don’t have this last thing, you can kiss your business goodbye pretty soon, trust me. I’d say it’s like the basic foundation you start building on a good and sustained business. Why so? Continue reading
Debit-Credit
No, not debit or credit card, but your accounting debits and credits. You may also say they’d be your assets and liabilities because with debits and credits you’re “creating” your balance sheet and income statement. Normally and simply put with the debit side of an entry you increase assets or decrease liabilities and vice a versa with the credit side. Continue reading