Bellevue WA Small Business Monthly Bookkeeping, CFO-Level Accounting, & Tax Strategist Outsourced Accounting in Bellevue Washington
The accounts that report non-operating revenues, other revenues, and gains are expected to have credit balances since they cause stockholders’ equity to increase. Gains often occur when a company sells an asset that was used in the business, and the cash received was greater than the asset’s carrying amount on the company’s books. Under the accrual method of accounting, the expenses should be reported in the same accounting period as the related revenues. At the end of the accounting year, the balance in each of the accounts for recording operating revenues will be closed in order to start the next accounting year with a zero balance. The revenue accounts are expected to have credit balances (since revenues cause the stockholders’ or owner’s equity to increase).
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