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Petty Cash Book

Businesses maintain a petty cash book to record petty cash transactions except recording all the cash transactions in the cash book. Petty cash transactions refer to the transactions with small values that occur frequently. Petty cash transactions involve small cash Read more…

Source documents

Source documents

Source documents are the documents that provide information on the transactions to record in the prime entry books. Therefore, we call a source document as an original document since it contains the original details of the transaction. Moreover, it is Read more…

Expenses

An expense is simply a cost to the business. According to accounting, an expense is a reduction in equity except due to drawings. Even drawings by the owners lead to a decrease in equity. But, the expense is a reduction Read more…

Income

In simple terms, the income is the money that a business receives from its business activities. Therefore, income includes a business’s earnings. Other names for income are revenue and turnover. In accounting, we define income as an increase in equity Read more…

ledger

Ledger accounts

Introduction to ledger accounts We use ledger accounts to record transactions in accounting. Transactions lead to change accounting elements. Accounting elements are the assets, equity, liabilities, income, and expenses.  A change can be an increase or a decrease. Therefore, we Read more…

Accounting

What is Accounting? Accounting is the process of providing information to the interested parties of a business (business stakeholders) for their decision making. Owners, employees, customers, debtors, investors,  and the government are the key interested parties among other interested parties. Read more…

Equity

  If a business has liabilities, the business will have to use a part of its assets to settle those liabilities. Once the business uses its assets to settle its liabilities, the residual/remaining is called equity. Therefore, equity is the Read more…