Accounting Articles

What is a General Ledger?  A general ledger is a fundamental tool used in accounting to maintain a detailed record of all financial transactions undertaken by an entity. It serves as a central repository where bookkeepers, accountants, and financial managers document...

What is a General Journal?  A general journal is a systematic record of a company's financial transactions arranged in chronological order. Its primary function is to aid in the reconciliation of accounts and facilitate the generation of financial statements....

What is Owners Equity?  Owner's equity represents the residual interest in an entity's assets after deducting all liabilities. It signifies the extent of ownership in the entity held by the sole proprietor, partners, or shareholders. Thus, it reflects the entity's net...

What is a Chart of Accounts?  A Chart of Accounts (COA) is essentially a comprehensive list of all the financial accounts maintained within an entity's general ledger, which serves as the central repository for recording all business transactions during a specific...

What is a Trial Balance?  A trial balance is like a financial checkpoint for an entity's accounting system. It's a report that summarises all the credits and debits recorded in the entity's accounts during a certain period, usually a month or a quarter. The main...

What is Double Entry Accounting?  Double entry accounting, also known as double entry bookkeeping, is a method of recording financial transactions where each transaction is recorded twice. These records, known as bookkeeping entries, are made in two columns: debits...

What is the Accounting Equation?  The accounting equation, also referred to as the balance sheet equation, serves as a cornerstone of accounting. It outlines the relationship among an entity's assets, liabilities, and owner's equity at any given moment.  To compute...

What is Net Income?  Net income is essentially the financial conclusion of a business operations over a given period, like a fiscal quarter or a year. Its often termed as the bottom line because its situated at the bottom of the income statement. This figure indicates...

What is Gross Income?  Gross income is the total amount of money an entity earns before any deductions or taxes are taken out. It includes all sources of income. For instance:  Revenue from Sales of Goods and Services: This is the primary source of income for most...