Bookkeeping Blog

What Are The Effects Of Overstating Inventory?

Here again, no matter which situation is causing the reduction in the inventory to sales ratio, either one suggests that you are effectively managing your business's inventory levels and its cash flow. Inventory turnover also reflects the carrying co... Read more

What Are Permanent Accounts?

Typically, permanent accounts have no ending period unless you close or sell your business or reorganize your accounts. All income statement balances are eventually transferred to retained earnings. In accounting, a permanent account refers to a gene... Read more

Liquidity Ratio Definition & Meaning

It indicates that the company is in good financial health and is less likely to face financial hardships. Notice that the cash ratio is much smaller than the other two ratios. In analyzing the cash ratio, any ratio greater than 0.5 is considered good... Read more

Rules Of Debit And Credit

Third, the opposite holds true for liability, revenue, and equity accounts. The mnemonic for remembering this relationship is G.I.R.L.S. Accounts which cause an increase are Gains, Income, Revenues, Liabilities, and Stockholders' equity.... Read more

A Beginner’s Tutorial To Bookkeeping

Bookkeeping offers much lower barriers to entry, and the competition you face in the job search is less fierce. There are critical differences in job growth and salaries between the two. Growth for accountants and auditors is expected to continue for... Read more

Certified Public Accountant Cpa

I was fortunate to get a job offer from a mid-size CPA firm in New England while I was a senior in college, and I spent many years working there as an auditor. Over 40 of the state boards now require applicants for CPA status to complete a special ex... Read more

How Is A Voucher Used In Accounts Payable?

If you are going to create the payment in the next batch of automatic payments, you enter the prepayment voucher and then follow the regular procedures for processing automatic payments. To make the payment using manual payments, you create the prepa... Read more