In the last article, we discussed partner capital accounts, contributions, and withdrawals, as well as the allocation of periodic income. Now we’ll look at how to account for the termination of a partnership.

Many of the accounting principles on this website apply to any type of company. In this series of articles, we focus on the basics of accounting for partnerships, a business entity formed by two or more owners that is less structured than a corporation.

“Closing the books” is an important process in the life cycle of any company. It is necessary for both reporting and tax purposes and helps management assess the health and well-being of the business. In this article, we will look at why the process is necessary and discuss the role played by the Income Summary account at the end of a fiscal year.

Companies often provide warranties to their customers. There may be standard warranties and extended warranties. Standard warranties are provided when a product is sold and may cover periods from a few months to multiple years. Extended warranties usually require a separate payment and cover periods in addition or after standard warranties. Companies need to account for standard and extended warranties appropriately. We will discuss such accounting in this article.

Organizations purchase insurance to obtain protection from unforeseen events and to “share” the cost of potential losses with other entities. Insurance can cover business, auto, health and workers’ compensation losses, among others. In this article, we will look at situations when insurance companies quote an annual premium for coverage and how this is accounted for.

External financing often represents a significant or important part of a company’s capital structure. Companies obtain such financing to fund working capital, acquire a business, etc. The process of obtaining a loan or issuing debt securities involves costs. In this article, we will look at accounting requirements for debt issuance costs under US GAAP and an example of accounting for such costs using the effective interest rate method and the straight-line method.

In this article we will discuss special journals and provide an example of a purchases special journal.

In our computerized world most accounting records are maintained in accounting software databases or spreadsheets, and accountants don’t think much in terms of general ledger or subsidiary ledgers like they did when most accounting records were maintained on paper. However, such concepts still exist. In this second part of the two-part article we will look at examples of accounts payable subsidiary ledger (i.e., accounts payable aging), inventory subsidiary ledger, and fixed assets subsidiary ledger.

In our computerized world most accounting records are maintained in accounting software databases or spreadsheets, and accountants don’t think much in terms of general ledger or subsidiary ledgers like they did when most accounting records were maintained on paper. However, such concepts still exist. In this first part of the two-part article we will discuss what subsidiary ledgers are and look at an example of an accounts receivable subsidiary ledger (i.e., accounts receivable aging).

Fixed asset donations are rare when one talks about for-profit companies, but such donations are more common when one talks about non-for-profit companies. Fixed asset donations can be inbound or outbound. How does a company account for such donations?