Category: Accounting
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Understanding Capital Expenses vs Operating Expenses: A Friendly Guide
What Are Capital Expenses? Capital expenses (CapEx) refer to the funds used by a business to acquire, upgrade, and maintain physical assets such as property, plants, and equipment. These expenditures are often substantial and are intended for long-term benefits. For instance, purchasing a new machine or a building falls under CapEx. The key point here…
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Cash vs Accrual Basis Accounting: Which Is Right for Your Business?
Understanding Cash and Accrual Basis Accounting Accounting methods might seem technical, but understanding the difference between cash basis and accrual basis accounting is crucial for any business owner. Cash basis accounting records income and expenses only when cash changes hands. In contrast, accrual basis accounting recognizes revenue and expenses when they are earned or incurred,…
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Understanding Bank Reconciliation and Its Frequency
Bank reconciliation is a critical accounting process that entails comparing the financial records maintained in your accounting software or ledger with the corresponding information on your bank statement. The primary objective of bank reconciliation is to ensure that the balances in these two records match, thereby verifying the accuracy of financial data and identifying any…
