by Small Business Accounting Software | Jan 7, 2026 | Chart of Accounts, Terminologies
Taxes accrued but not yet payable due to timing differences between accounting and tax reporting. Often arises from depreciation methods. Recognized as future obligations.
by Small Business Accounting Software | Jan 7, 2026 | Chart of Accounts, Terminologies
In sole proprietorships, this represents the owner’s initial and ongoing contributions. It reflects investment and retained profits. Balances with drawings or withdrawals.
by Small Business Accounting Software | Jan 5, 2026 | Assets, Chart of Accounts, Terminologies
A contra-asset account that records the total depreciation expense charged against fixed assets. It reduces the book value of assets over time. This reflects wear, tear, or obsolescence.
by Small Business Accounting Software | Dec 26, 2025 | Chart of Accounts, Expenses, Terminologies
The cost of borrowing money through loans or bonds. Recorded based on accruals, not just payments. Impacts net income directly.
by Small Business Accounting Software | Dec 24, 2025 | Chart of Accounts, Expenses, Terminologies
Estimation of receivables that are unlikely to be collected. Recorded to align with the matching principle. Prevents overstated income.
by Small Business Accounting Software | Dec 23, 2025 | Chart of Accounts, Expenses, Terminologies
Spending on meals, events, or hospitality to build client relationships. Subject to regulatory and tax restrictions. Needs proper documentation for deductions.
