3 Column Ledger Accounts

The 3 column ledger account adds a third column to the standard T account used in bookkeeping, in order that a running balance can be maintained on the account. The three columns are debit, credit and balance.

Last modified May 15th, 2020 by Michael Brown
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Book Value of Equity Formula

The book value of equity represents the amount of a business which is available for the distribution to the stockholders. The total book value of equity needs to be allocated to preferred stockholders before common stockholders.

Last modified April 9th, 2020 by Michael Brown
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Net Credit Sales

Net credit sales represents revenue a business generates by allowing customers credit terms, less sales returns allowances and discounts. Net credit sales excludes cash sales.

Last modified January 8th, 2020 by Michael Brown
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Different Types of Accounting

Accounting is a set of concepts and methods used to measure and report financial information about a business. Financial accounting and management accounting are different types of accounting used by accountants to present the information in alternative forms for different purposes.

Last modified March 10th, 2020 by Michael Brown
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Posting in Accounting

The business updates the ledger by copying each of the entries in the books of prime entry to the appropriate account in the ledger. This updating process is referred to as posting the general ledger.

Last modified January 15th, 2020 by Michael Brown
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Types of Accounts in Accounting

The double entry bookkeeping system categorizes accounts into personal and impersonal accounts. Impersonal accounts are then further divided into real accounts and nominal accounts. The purpose of using these types of accounts in accounting is to simplify the bookkeeping system.

Last modified January 15th, 2020 by Michael Brown
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Budgeting Techniques

There are numerous budgeting techniques that can be used to produce a target plan for a business including zero based, flexible and rolling budgets.

Last modified January 15th, 2020 by Michael Brown
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General Ledger Accounting

The general ledger is the central ledger in the double entry bookkeeping system. It includes all the accounts a business lists in its chart of accounts and records accounting transactions by account and then date order. A trial balance can be extracted from the general ledger which forms the basis for the production of the financial statements.

Last modified September 23rd, 2022 by Michael Brown
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Sale or Return Basis Accounting

Sale or return basis is a term used to refer to an arrangement whereby goods are sent by a business to a customer on the understanding that the customer will either approve and retain the goods or return then within a specified period of time.

Last modified July 16th, 2019 by Michael Brown
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Economic Batch Quantity (EBQ)

Manufacturers who utilize a batch costing system need to determine the batch size which will minimize the total cost of production. The economic batch quantity formula can be used to calculate this value.

Last modified July 16th, 2019 by Michael Brown
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Batch Costing Method

Batch costing can be used by both manufacturing and service industries. The purpose of the batch cost system is to allow a business to calculate the total cost of a batch of identical units in order that a unit cost, selling price and profitability can be determined.

Last modified July 16th, 2019 by Michael Brown
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Fixed Assets Warranty Accounting

A product warranty can either be embedded in the cost of the asset itself or sold as a separate extended warranty at an additional cost. The additional cost is not capitalized but treated as a deferred expense in the accounts.

Last modified December 13th, 2019 by Michael Brown
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