Straight-line Depreciation is used to depreciate Fixed Assets in equal amounts over the life of the asset. The basic formula to calculate Straight-line Depreciation is: (Cost - Salvage Value) / Class...
Category: Accounting Basics
What is the Difference Between a Single-step and a Multi-step Income Statement?
A single-step income statement and a multi-step income statement differ in the amount of categorizing of financial information found on the report. A single-step income statement shows Revenues and...
What is the Difference Between Periodic and Perpetual Inventory?
For a merchandising business, one of the most important success factors is the management of inventory. Because the cost and tracking of inventory is so critical, decisions made about inventory can...
An adjunct account is an account that adds to the value another account without impacting the balance in the main account. The combination of the balance in the main account and the balance in the...
What is the Difference Between Permanent and Temporary Accounts?
In accounting, Permanent accounts carry a balance from one month to the next. Temporary accounts are zeroed out at the end of each month. Permanent accounts are the balance sheet accounts, Assets,...
Petty Cash is a small amount of funds set aside to cover incidental expenses such as postage, office supplies, or employee reimbursements. Petty Cash is an Asset. The purpose of Petty Cash is to...