Sundry expenses are costs which may be relatively small or occur infrequently and are therefore not assigned to a specific ledger group. They are also known as miscellaneous expenses and are classified together as a grou... More »

Companies use adjustment entries to align expenses and revenues to the accounting period where they occurred. The process ensures that all income, expense, asset and liability accounts reflect their true values when repo... More »

The prudence concept, also known as the conservatism principle, is an accounting principle that requires an accountant to record liabilities and expenses as soon as they occur, but revenues only when they are assured or ... More »

Accrual accounting provides an accurate way of matching business income and expenses to the correct time periods, explains Nolo. Businesses with sales of over $5 million per year or inventories exceeding $1 million are l... More »

Fixed costs are business expenses that do not fluctuate in line with changes in production levels or sales volumes, while variable costs are expenses that fluctuate directly and in proportion to changes in production and... More »

The primary drawback of using reversing entries is that if the accountant forgets to do it, revenues or expenses can end up being overstated, depending on the transaction. Benefits include a greater degree of accuracy, e... More »

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People need accounting because it keeps a record of cashflow, produces financial reports and monitors business expenses of an organization, according to the Houston Chronicle. Accounting helps owners make vital decisions... More »