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Balance sheet

Records of the values of each account in the balance sheet are maintained using a system of accounting known as double-entry bookkeeping...
In other words: businesses have assets and so they cannot, even if they want to, immediately turn these into cash at the end of each period...


A small business balance sheet lists current assets such as cash, accounts receivable, and inventory, fixed assets such as land, buildings, and equipment, intangible assets such as patents, and liabilities such as accounts payable, accrued expenses, and long-term debt...


A business operating entirely in cash can measure its profits by withdrawing the entire bank balance at the end of the period, plus any cash in hand...


Balance sheet substantiation

Balance Sheet Substantiation is the accounting process conducted by businesses on a regular basis to confirm that the balances held in the primary accounting system of record (e.g...
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Bookkeeping

Most individuals who balance their check-book each month are using such a system, and most personal finance software follows this approach...


Finally financial statements are drawn from the trial balance, which may include:

Entry systems

Two common bookkeeping systems used by businesses and other organizations are the single-entry bookkeeping system and the double-entry bookkeeping system...
Double-entry bookkeeping requires posting (recording) each transaction twice, using debits and credits...
It may be split into two daybooks: receipts daybook for money received in, and payments daybook for money paid out
  • General Journal daybook, for recording journals
  • Petty cash book

    A petty cash book is a record of small value purchases before they are later transferred to the ledger and final accounts, it is maintained by a petty or junior cashier...
    Daybooks include: