Opening Balance Equity: How to Set Up Books Mid-Year and Zero It Out
Opening Balance Equity is a temporary account that should read $0.00 once setup is done. Learn what it means, how to set up books mid-year from a trial
#journal-entries
Journal Entries
Master journal entry creation and accounting transactions
Opening Balances Done Right: Mid-Year Setup and Clearing the OBE Account
Opening Balance Equity is the suspense account accounting software creates to keep the balance sheet in balance during migration. Build a supportable opening trial balance, reconcile every account at the cutover date, then journal OBE into Retained Earnings, Owner's Capital, or Common Stock and Additional Paid-in Capital based on entity type.
Recording Sales Tax You Collect: A Liability, Not Revenue
Sales tax you collect belongs to the state, not your revenue line. Here are the journal entries, the month-end reconciliation routine, and the multi-state economic nexus rules that keep your books audit-ready.
Sales Returns and Allowances: Contra-Revenue Accounting Under ASC 606
Sales returns and allowances are contra-revenue, not expenses. This guide shows the journal entries, ASC 606 refund liability and right-of-return asset, and how to estimate returns at period-end so net sales and gross margin stay honest.
Sales Returns, Allowances, and Contra-Revenue Accounting: How to Record Refunds Without Inflating Your Gross Margin
A walkthrough of how to record sales returns, allowances, and discounts as contra-revenue accounts under ASC 606, including the refund liability journal entries, sales tax reversal, and the gross-margin effects most small businesses miss.
Suspense Accounts: How to Park Unidentified Transactions and Still Close on Time
A suspense account is a temporary ledger account that holds an unidentified transaction or an unexplained trial-balance difference so the month-end close can finish on time. This guide covers when to use one, how to record and clear the entries, and how it differs from a clearing account.
Allowance for Doubtful Accounts: Keep Accounts Receivable Honest
The allowance for doubtful accounts estimates uncollectible receivables. Learn the aging and percentage-of-sales methods, plus how write-offs keep accounts
Asset Retirement Obligations Under ASC 410: How Operators Record the Future Cost of Restoring a Site at Day One
ASC 410-20 requires recording an ARO on day one—when drilling, erecting, or build-out finishes.
Bank Reconciliation Done Right: The Monthly Process That Catches Errors and Fraud Early
A monthly bank reconciliation done in 30 to 90 minutes is the cheapest fraud control a small business has. This guide walks through the two-column worksheet, how to handle outstanding checks and deposits in transit, the recurring items that trip people up, and the internal controls that turn the exercise into real protection.
Foreign Exchange Gains and Losses: A Practical Multi-Currency Accounting Guide for Small Businesses
How small businesses record foreign exchange gains and losses under US GAAP (ASC 830) and IRC Section 988, with sample journal entries, realized vs. unrealized treatment, period-end revaluation, and a practical monthly close workflow.
Debits and Credits Explained: A Plain English Guide for Small Business Owners
A practical explanation of how debits and credits work in double-entry accounting — covering the five account types, the accounting equation, real-world journal entry examples, and the most common bookkeeping mistakes small business owners make.
Deferred Revenue: What It Is, How to Record It, and When to Recognize It
Learn what deferred revenue is, why it is recorded as a liability, and how to recognize it over time. Includes journal entry examples, ASC 606 guidance, common mistakes, and practical tips for small businesses managing advance payments.