Financial Audits – Basic Tests

Financial audits are intended to provide some assurance to the public that a company’s financial statements are presented fairly and accurately, in accordance with the established or stated criteria.  The public may include the shareholders of the company, debtors such as bondholders, banks or other financial institutions and some government entities. In general, a financial … Continue reading Financial Audits – Basic Tests

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Accounting Trial Balance Example and Financial Statement Preparation

The last two steps in the accounting process are preparing a trial balance and then preparing the balance sheet and income statement. This information is provided in order to communicate the financial position of the entity to interested parties. TRIAL BALANCE A trial balance is a list and total of all the debit and credit … Continue reading Accounting Trial Balance Example and Financial Statement Preparation

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Basic Accounting: What is a Liability?

We touched briefly on liability in a previous article, and we mentioned it again during our asset discussion. But what and how do we classify something as a liability? A liability is something for which we are responsible. Liabilities are not just loans; they can be homework assignments, study material, or our little brother on Saturday night. In … Continue reading Basic Accounting: What is a Liability?

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Understanding Accounting: Accounts Payable Function

The accounts payable function of accounting is an area that requires close monitoring and accurate record keeping, unless you ‘d like to pay for things you don’t receive. Everything that you purchase in the course of operating your business is termed an “account payable”. How you choose to pay for that merchandise, may vary. Some small items … Continue reading Understanding Accounting: Accounts Payable Function

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