Tag Archives: expenses

How To Accrue Expenses to Last Year

This article addresses the concept of taking expense payments made this year and recognizing them for Income Statement purposes in the previous year.   To better explain, here is a scenario: You received a services bill from a vendor that is dated January 5th of 2023, however the services that were performed all occurred in

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Chart of Accounts Setup – Part 3

In part 3 of these series regarding the Chart of Accounts setup, I will delve into thinking about the various ways you can recognize Direct Costs in your Chart of Accounts. Direct Costs (also can be known as Cost of Goods Sold or Cost of Services) can be recognized based strictly on what you are

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Overhead vs. Cost of Goods Sold

When constructing your chart of accounts, it is usually a good idea to, at least, create two major categories of expenses: Overhead (Indirect Costs) Cost of Goods Sold (Direct Costs) Direct costs and indirect costs are differentiated in the following ways: Direct costs are spent because they are used to create revenues for your business:

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