We discuss the process of balancing the account in our post on balancing off accounts. The business updates the ledger by copying each of the entries in the books of prime entry to the appropriate account in the ledger. One key difference between a journal and a ledger is that the ledger is where double-entry… Continue reading How a General Ledger Works With Double-Entry Accounting Along With Examples

When earnings are transferred, all temporary accounts should be closed. Some disadvantages are that the information may be biased, can be estimated to a degree, can be manipulated, and that the units used to measure business performance, namely cash, change in value. Once you’ve made the necessary correcting entries, it’s time to make adjusting entries.… Continue reading Accounting Cycle 8 Steps in the Accounting Cycle, Diagram, Guide

Unearned revenue is typically classified as a current liability because the company expects to fulfill its obligations and deliver the goods or services within one year. However, if the company anticipates that it will take more than one year to fulfill its obligations, the unearned revenue should be treated as a long-term liability. A company… Continue reading Accrued Revenue: Meaning, How To Record It and Examples