Royalty accounts are used to record royalties paid by a licensee to a licensor for the use of a long term asset owned by the licensor.
The adjusting journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of adjusting entry transactions.
In each case the journal entries show the debit and credit account together with a brief narrative.
The cash book in accounting is classified as both a journal, in that it is a book of prime entry, and a subsidiary ledger as it records debits and credits. The cashbook has many different forms including single column, double column, and triple column formats.
Capital receipts are those which are normally non-recurring and either increase a liability account or decrease an asset account. Revenue receipts are usually recurring and are part of the normal trading operations of the business, such as the sale of goods and services.
The four main financial statements are the income statement, statement of retained earnings, balance sheet, and cash flow statement. All four statements are interrelated and allow the user to more fully understand the financial performance of the business through the analysis of its financial statements.
Contra means against. In bookkeeping terms, a contra expense account refers to an account which is offset against an expense account.
As an expense account is normally a debit balance, a contra expense account will normally be a credit balance. When the two balances are offset against each other they show the net balance of both accounts.