There are six steps in the accounting process. Journals In the double-entry accounting system, every transaction must record an equal and opposite effect in at least two separate accounts. One account is debited, and the other account is credited. Debits should therefore always equal credits. Think about balancing the books like you would balancing a […]
The way in which we account for business transactions is based upon the accounting principles known as Generally Accepted Accounting Principles or GAAP. US GAAP is the name of the accounting standard, and IFRS is a different standard used around the world. These business transactions are recorded within the accounting books, and are subsequently summarized […]
Income Statement Consolidation
An income statement consolidation is the process of combining the income statement of a parent company with all of its subsidiary companies into one single consolidated income statement. The consolidated income statement presents the financial position of this single economic entity. There are 8 steps in the income statement consolidation process. These are the same […]
Operating Expenses Disguised as Inventory
Companies need to keep some amount of inventory. When I go to a home repair supplier, I expect them to have the copper pipe I need in stock. When I go to my local bakery, I expect them to have the macarons I crave in stock. When I go to my local grocer, I expect […]
A balance sheet consolidation is the process of combining the balance sheet of a parent company with all of its subsidiary companies into one single consolidated balance sheet. The consolidated balance sheet presents the financial position of this single economic entity. There are 8 steps in the balance sheet consolidation process. These are the same […]
