Understanding the Accounting Entry for Supplies Used

Supplies are items companies use while doing business. These include office supplies like paper, pens, and printer ink or cleaning supplies like soap and paper towels. When companies first buy supplies, they record them as assets. However, as workers use these supplies, their value decreases, and companies need to track this change in their books….

Accounts Closed with Debit Entries at Period End

At the end of every accounting period, accountants need to close various accounts to start fresh in the next period. This process, called closing entries, involves moving account balances to permanent or temporary categories. Some accounts close with debit entries, while others close with credit entries. Understanding which accounts close with debit entries helps maintain…

Standard Cost Variance Accounts in Accounting Periods

Standard cost variance accounts have a zero balance at the start and end of each accounting period. This fundamental accounting principle helps businesses track and analyze differences between expected and actual costs. Let’s explore why these accounts work this way and what it means for businesses. Understanding Standard Cost Variance Accounts Standard cost variance accounts…

Which accounts are closed at the end of an accounting period?

There are two main types of accounts in accounting- temporary and permanent. Temporary accounts, also called nominal accounts, record transactions for only a single accounting period, such as one year. All income statement accounts, which show a company’s revenues and expenses, are temporary. These include: The balances in temporary accounts are zeroed out at the…

Identifying Accounts That Need Adjustments at End of Period

At the end of an accounting period, some accounts in a company’s books might not show the right amounts. The amounts in these accounts must be changed to match what happened during that time. Accountants call these changes “adjustments.” Adjustments are made because of two important ideas in accounting: A few main accounts often need…