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For example, a fund can be classified as a permanent fund if it is being used to pay for accounting services for a perpetual endowment of a government-run cemetery or financial endowments towards a government-run library.
An expense account is the right to reimbursement of money spent by employees for work-related purposes. [1] Some common expense accounts are Cost of sales, utilities expense, discount allowed, cleaning expense, depreciation expense, delivery expense, income tax expense, insurance expense, interest expense, advertising expense, promotion expense, repairs expense, maintenance expense, rent ...
The general ledger should include the date, description and balance or total amount for each account. Because each bookkeeping entry debits one account and credits another account in an equal amount, the double-entry bookkeeping system helps ensure that the general ledger is always in balance, thus maintaining the accounting equation:
Closing entries are journal entries made at the end of an accounting period to transfer temporary accounts to permanent accounts. An "income summary" account may be used to show the balance between revenue and expenses, or they could be directly closed against retained earnings where dividend payments will be deducted from. This process is used ...
Accounts may also be assigned a unique account number by which the account can be identified. Account numbers may be structured to suit the needs of an organization, such as digit/s representing a division of the company, a department, the type of account, etc. The first digit might, for example, signify the type of account (asset, liability ...
Fund accounting is an accounting system for recording resources whose use has been limited by the donor, grant authority, governing agency, or other individuals or organisations or by law. [1] It emphasizes accountability rather than profitability , and is used by nonprofit organizations and by governments.
Examples of common financial accounts are sales, accounts [1] receivable, mortgages, loans, PP&E, common stock, sales, services, wages and payroll. A chart of accounts provides a listing of all financial accounts used by particular business, organization, or government agency.
However, there are instances of accounts, known as contra-accounts, which have a normal balance opposite that listed above. Examples include: Contra-asset accounts (such as accumulated depreciation and allowances for bad debt or obsolete inventory) Contra-revenue accounts (such as sales allowances) Contra-equity accounts (such as treasury stock)