Accounts Receivable Control Account

The accounts receivable control account is an account in the general ledger which maintains summary postings relating to accounts receivables. The account, which is sometimes referred to as the sales ledger control account, is used to allow the detail of customer transactions to be kept in a separate subsidiary personal account ledger which is not part of the double entry bookkeeping system.

Last modified July 16th, 2019 by Michael Brown
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11 Users of Accounting Information

Who are the users of management accounting information? The users of accounting information are numerous and varied and include managers, owners, and investors each of which uses the information for a different purpose.

Last modified December 19th, 2019 by Michael Brown
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Accounting Transaction Analysis

Accounting transaction analysis is part of the accounting cycle, and is the name given to process involved in using information from accounting source documents to firstly identify whether the transaction is an accounting transaction, and then applying the basic bookkeeping rules of debit and credit to break down the transaction into its component parts.

Last modified August 14th, 2019 by Michael Brown
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Accounting Assumptions

Financial statements are multipurpose documents used by many different parties for different reasons. For this reason financial statements need to be based on a generally agreed accounting framework or structure so that all parties understand how they are produced. Accounting assumptions can be considered to be the foundations on which the framework is based.

Last modified January 22nd, 2020 by Michael Brown
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Subsidiary Ledgers in Accounting

When a business has only a small number of accounting transactions then the double entry bookkeeping postings can all be maintained in a single ledger know as the general ledger. As the business expands the number of transactions and accounting staff increases and it becomes impractical to maintain one ledger due to its large size, and the problems of access to the ledger by multiple staff. The solution is to sub-divide the ledger.

Last modified July 16th, 2019 by Michael Brown
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Control Accounts

In a small business the accounts can be kept in one accounting general ledger and a trial balance can be extracted from that ledger. In a larger business, where the transactions are too many to be managed by one person, subsidiary ledgers such as the accounts receivable ledger (sales ledger) and the accounts payable ledger (purchase ledger) will be opened.

Last modified November 10th, 2022 by Michael Brown
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Accounting Errors and Corrections

Accounting errors can occur in double entry bookkeeping for a number of reasons. Accounting errors are not the same as fraud, errors happen unintentionally, whereas fraud is a deliberate and intentional attempt to falsify the bookkeeping entries. An accounting error can cause the trial balance not to balance, which is easier to spot, or the error can be such that the trial balance will still balance due to compensating bookkeeping entries, which is more difficult to identify.

Last modified November 16th, 2022 by Michael Brown
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Cash vs Accrual Accounting

Cash vs accrual basis of accounting are two methods of recording transactions for a business.

Under the cash basis, transactions are recorded when cash is received or paid, under the accrual basis revenue is recorded when earned and expenses are recorded when incurred.

Last modified October 7th, 2022 by Michael Brown
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Property and Financial Claims

Double entry bookkeeping and accounting are based on the fundamental premise that for each property a business has there will be an equal financial claim on that property, and that both property and financial claims are measured in monetary amounts.

Last modified October 4th, 2019 by Michael Brown
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Journal Entries Basics

Journal Entries are used to record transactions in the Journal.

Most accounting transactions pass through what is called a book of prime entry before they reach the general ledger. Books of prime entry include for example the cash book, purchases day-book, and sales day-book.

There are however entries which do not go through a book of prime entry which are recorded in the Journal using Journal Entries.

Last modified January 13th, 2021 by Michael Brown
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Debit and Credit in Accounting

Debit vs credit are terms used in double entry bookkeeping. They refer to entries made in accounts to reflect the financial transactions of a business. The terms are often abbreviated to Dr (Debit) and CR (Credit).

Last modified October 4th, 2022 by Michael Brown
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Accounting Concepts

The accounting assumptions are supplemented by a number of accounting concepts, which act as guides on how particular business transactions should be reported in financial statements, and allow them to be objective (not subject to bias or influenced by personal feelings or opinions).

Last modified July 10th, 2020 by Michael Brown
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