Bookkeeping

Contra equity accounts are a unique category within a company’s equity section of the balance sheet, representing deductions from the total equity amount. If a customer cancels the subscription within this period, the company would need to reverse the sale by crediting the revenue account and debiting the sales returns account for $1,200. Returns are […]

Keep in mind that decreases to your liabilities—say, for example, making a loan payment—can decrease your cash flow. After you account for assets, adjust your net income for changes in your liabilities, like accounts payable, expenses, and debt. In general, increases to your assets (except for cash) decrease your complete cash flow, while decreases to […]