The accounting cycle comprises of eight collaborative steps. They are:Identifying and analyzing the transactions Recoding these transactions into the general journal Posting to the General Ledger Preparing a trial balance Making adjusting entries Preparing an Adjusted Trial Balance Preparing financial statements Closing accounts
When a sole proprietor or the business owner withdraws assets such as goods or cash from business for his personal use, accounting termed it as owner’s drawing.
Variable cost varies with the level of output while fixed cost remains fixed at any level of production output.
Reversing entries in accounting records at the beginning of an accounting period to cancel out or reverse the effects of adjusting entries of preceding accounting period.
A business transaction (selling or buying a thing) that does not involve cash is called non-cash transaction.
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Account receivable is classified as an asset because it is the amount that the company will receive on behalf of the services that it has provided.
When a company provides its services or delivers its goods before the payment is received is called accrued revenue.
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