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Purchasing

Purchasing is an important process within an entity’s business. Effectively you’re purchasing everything you need – your supplies, your services, your employees’ time and so on. When we talk about purchasing, we’re talking about things you’re buying for your company for your business.  (more…)

Entity’s equity

As we have discussed earlier, an entity’s capital or equity is something that the owners have effectively invested into the entity in the form of paying in capital and later on leaving profits undistributed – share capital, reserves and retained earnings comprise the most significant part of equity under normal conditions. An entity’s equity is […]

Payable for expenses

There are two things one can buy from a supplier – an item of inventory or an item of expense (be it service or an item charged directly to expenses). Whilst items of inventory are a topic on their own, with this post we’ll focus on expenses.    (more…)

Change in residual value

Whilst we have discussed the term ‘residual value’, we haven’t really approached the matter of this being changed. An asset’s residual value is an estimate the management makes using it’s best knowledge of the asset, it’s condition, it’s possible market at the end of it’s useful life, how extensively it will be used and so […]

Accounting for crediting sales revenue

Crediting sales is something that happens no matter how hard you try and have your invoices correct, your goods shipped in correct amounts and items. There’s a factor you cannot monitor and that’s you customer for instance. They may decide they want something else, something additional and so on. Thus it’s important to understand that […]