In this case, the total assets and owner’s equity increased $5,000 while total liabilities are still the same. As you can see, assets equal the sum of liabilities and owner’s equity. This makes sense when you think about it because liabilities and equity are essentially just
Read MoreDepending on the company’s finances, it may need that cash to continue operating its business or funding growth. The longer it takes to collect the accounts receivables, the more difficult it is for a business to run its operations. Factoring allows a company to sell off
Read MoreRetailCo was significantly adversely impacted by decreases in foot-traffic and closed its stores on 15 March 2020. Economic and regulatory circumstances changed on 30 June 2020 such that RetailCo wished to reopen its stores, however the significant period of time with no cash inflow resulted in
Read MoreAccounting textbooks generally divide adjusting entries into Accrual and Deferral categories. In this article, we separate adjusting entries into Revenue transactions and Expense transactions. This allows for a look at the contrast between Accruals and Deferrals within those Revenue and Expense transactions. The entry for insurance
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