If you reduce the basis of your property because of a casualty, you cannot continue to use the percentage tables. For the year of the adjustment and the remaining recovery period, you must figure the depreciation yourself using the property’s adjusted basis at the end of the year. Under MACRS, averaging conventions establish when the…

Auditors prefer that a company use the effective interest method to amortize the discount on bonds payable, given its higher level of precision. The format of the journal entry for amortization of the bond discount is the same under either method of amortization – only the amounts recorded in each period will change. For example,…

So, an accountant can be a bookkeeper, but not all bookkeepers are accountants. But before we dig into those ideas, let’s talk about what day-to-day work looks like for an accountant. Accounting is something that most people have heard about at work, on TV, or online. Oversee risk management for an organization’s or business’ funds…

The information recorded in these daybooks is then transferred to the general ledgers, where it is said to be posted. Not every single transaction needs to be entered into a T-account; usually only the sum (the batch total) for the day of each book transaction is entered in the general ledger. When an account has…

In this post, we’ll further define bad debt expenses, show you how to calculate and record them, and more. Read on for a complete explanation or use the links below to navigate to the section that best applies to your situation. Let’s consider a situation where BWW had a $20,000 debit balance from the previous…

Bench offers its services in five plans, designed to accommodate businesses of different sizes based on their monthly expenses. Regardless of your plan, Bench connects you with a dedicated bookkeeper with whom you work to set up all of your information and accounts on the Bench platform. Bookkeeper360 can work with a variety of payroll…

In accounting, the effective interest method examines the relationship between an asset’s book value and related interest. In lending, the effective annual interest rate might refer to an interest calculation wherein compounding occurs more than once a year. In capital finance and economics, the effective interest rate for an instrument might refer to the yield…

This will help ensure that all funds related to the business are tracked efficiently and avoid any potential legal issues down the line. To reconcile a debt, you need to gather all relevant documents, including bank statements, invoices, and receipts. This will help minimize any discrepancies between what you owe and what you’ve actually spent…

Content How to use the accounting equation with a classified balance sheet Control Accounts and Subsidiary Ledgers Purpose of a Classified Balance Sheet What are the Main Types of Assets? Assets Section Usually, assets are categorized in order of liquidity and liabilities by their due date. To prepare a classified balance sheet it is necessary…

Finding transaction detail in a complex chart of accounts can quickly become challenging. This useful general ledger dashboard lets you filter by specific GL accounts like revenue, expenses, or transfers. You can also zoom in for more granularity by period and see transaction details. Spot transaction origins and contact points for smoother reconciliations and less…