Income Summary Closing Entry
It is also important to note that the income summary account is primarily used in the manual accounting process. If your business uses automatic software to manage your financial needs, it will not use an income summary account to shift these temporary account balances. This process ensures that your temporary accounts are properly closed out […]
How to Calculate FIFO and LIFO
FIFO and LIFO also have different impacts on inventory value and financial statements. Under FIFO, older (and therefore usually cheaper) goods are sold first, leading to a lower average cost of goods sold. In contrast, LIFO results in higher COGS and lower reported gross income. Advantages of Implementing FIFO in Inventory Management Bill sells a […]
Accounts Payable Vs Notes Payable: Meaning and Differences
And unlike taking on investors, a note payable allows you to maintain ownership and full control over your company. However, these expenses can add up and need to be organized in a way that allows the process of making payments as efficient as possible. Suppose XYZ Company borrows $15,000 from ABC Bank on January 1st, […]