Category Archives: Bookkeeping

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Working Capital: Definition & Formula

Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. Working capital is also a measure of a company’s operational efficiency and short-term financial health. If a company has substantial positive NWC, then it...

4 2 Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries Principles of Accounting, Volume 1: Financial Accounting

Payroll expenses are usually entered as a reversing entry, so that the accrual can be reversed when the actual expenses are paid. An accrued expense is an expense that has been incurred before it has been paid. For example, Tim owns a small supermarket, and pays his employers bi-weekly. In March, Ti...