A liability is a debt or other obligation owed by one party to another party. If your books are up to date, your assets should also equal the sum of your liabilities and equity. See some examples of the types of liabilities categorized as current or long-term liabilities below. You can think of liabilities as […]
Hard money lenders offer short-term financing for real estate investors, but most homeowners are better off with traditional mortgage lenders. Payday loans and title loans provide small amounts of short-term cash at a high cost. Furniture, appliance, and department stores may also offer to finance purchases, but you can often find better terms …
In this instance, one asset account (cash) is increased by $200, while another asset account (accounts receivable) is reduced by $200. The net result is that both the increase and the decrease only affect one side of the accounting equation. The ledger is a book in which all accounts relating to a business enterprise are […]
Lana has a one-year lease on the apartment where she has lived for five months. When her stove, included in the lease, stops working properly, Lana contacts the landlord, asking that it be repaired. The landlord sent a repairman out several days later, though the repairman said the stove simply needs to be replaced, and […]
This means a new asset must be added to the accounting equation. A journal is the company’s official book in which all transactions are recorded in chronological order. Although many companies use accounting software nowadays to book journal entries, journals were the predominant method of booking entries in the past. Business …
A purchase order is sent by a customer to a vendor, requesting goods or services. As a vendor, you would receive a purchase order, fulfill the order, and then send an invoice to collect payment. Modern invoicing software products from SaaS companies enable you to automate, speed up, and manage the invoicing process so that […]