He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University. Normally businesses sell on credit so if for example you sell

No more manual entry for the general ledger vs journal—the software handles it all. Once you’ve recorded everything in the general journal, these entries are posted to the general ledger. It helps you make sure that every transaction is accounted for and nothing slips through the cracks. When you classify a transaction to a chart

The elasticity of demand may be defined as the percentage change in the quantity demanded which would result from one percent change in price. The elasticity of demand formula helps businesses determine whether to raise or lower prices. If demand is inelastic, they can raise prices without losing customers. If production is to be profitable,

When an investee declares a dividend, the investor reduces the carrying amount of their investment by the dividend amount. This approach reflects that dividends represent profits already recognized in the investor’s share of the investee’s earnings. The cost method of accounting is used when an investor owns less than 20% of the investee, holding a

When an asset is disposed of, the Fixed Assets account must be credited for the original cost of the fixed asset. You can learn more about items to be included in the original cost of a fixed asset in our article on what fixed asset accounting is. In this journal entry, the $21,000 cost of the