Category Archives: Bookkeeping

When are businesses required to use accrual accounting?

Under the accrual method transactions are recorded when they are incurred rather than awaiting payment. This means a purchase order is recorded as revenue even though fund are not received immediately. The same goes for expenses in that they are recorded even though…

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Accounts Receivable and Bad Debts Expense

Accounts Receivable and Bad Debts Expense The actual elimination of unpaid accounts receivable is later accomplished by drawing down the amount in the allowance account. basic accounting equation Two primary methods exist for estimating the dollar amount of accounts receivables not expected to…

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