Which of the following documents is best for verifying the correct balance in accounts payable

Before closing the books at the end of each reporting period, the accounting staff must verify that the detailed total of all accounts payable outstanding matches the payables account balance stated in the general ledger. Doing so ensures that the amount of accounts payable reported in the balance sheet is correct. This is called an accounts payable reconciliation. The accounts payable reconciliation process encompasses the steps noted below. This reconciliation process can be a difficult one when it is being performed for the first time. However, once all errors have been spotted and corrections made, it is usually relatively easy to update the reconciliation document in subsequent reporting periods.

Step 1. Reconcile the Prior Period

Compare the ending accounts payable account balance in the general ledger for the immediately preceding period to the aged accounts payable detail report as of the end of the same period. If these numbers do not match, you will have to reconcile earlier periods before attempting to reconcile the current period. If the variance is immaterial, it may be acceptable to proceed with the reconciliation for the current period.

Step 2. Look for Journal Entries

Review the accounts payable general ledger account to see if any journal entries were made to the account during the current reporting period. If so, document these items in a reconciliation spreadsheet.

Step 3. Engage in Additional Reconciliation Activities

Print the ending aged accounts payable report for the current reporting period. Enter the total amount outstanding from this report on the reconciliation spreadsheet. At this point, the reconciliation should be complete. If there is still a variance, and it is not a variance that occurred in a prior period, consider the following additional reconciliation steps:

Verify that the accounts payable journal was properly posted to the general ledger.
Verify that the aged accounts payable report was printed after all posting was completed.
Verify that the general ledger is set to the correct reporting period.

The accounts payable process or function is immensely important since it involves nearly all of a company's payments outside of payroll. The accounts payable process might be carried out by an accounts payable department in a large corporation, by a small staff in a medium-sized company, or by a bookkeeper or perhaps the owner in a small business.

Regardless of the company's size, the mission of accounts payable is to pay only the company's bills and invoices that are legitimate and accurate. This means that before a vendor's invoice is entered into the accounting records and scheduled for payment, the invoice must reflect:

what the company had ordered
what the company has received
the proper unit costs, calculations, totals, terms, etc.

To safeguard a company's cash and other assets, the accounts payable process should have internal controls. A few reasons for internal controls are to:

prevent paying a fraudulent invoice
prevent paying an inaccurate invoice
prevent paying a vendor invoice twice
be certain that all vendor invoices are accounted for

Periodically companies should seek professional assistance to improve its internal controls.

The accounts payable process must also be efficient and accurate in order for the company's financial statements to be accurate and complete. Because of double-entry accounting an omission of a vendor invoice will actually cause two accounts to report incorrect amounts. For example, if a repair expense is not recorded in a timely manner:

the liability will be omitted from the balance sheet, and
the repair expense will be omitted from the income statement.

If the vendor invoice for a repair is recorded twice, there will be two problems as well:

the liabilities will be overstated, and
repairs expense will be overstated.

In other words, without the accounts payable process being up-to-date and well run, the company's management and other users of the financial statements will be receiving inaccurate feedback on the company's performance and financial position.

A poorly run accounts payable process can also mean missing a discount for paying some bills early. If vendor invoices are not paid when they become due, supplier relationships could be strained. This may lead to some vendors demanding cash on delivery. If that were to occur it could have extreme consequences for a cash-strapped company.

Just as delays in paying bills can cause problems, so could paying bills too soon. If vendor invoices are paid earlier than necessary, there may not be cash available to pay some other bills by their due dates.

Purchase order

A purchase order or PO is prepared by a company to communicate and document precisely what the company is ordering from a vendor. The paper version of a purchase order is a multi-copy form with copies distributed to several people. The people or departments receiving a copy of the PO include:

the person requesting that a PO be issued for the goods or services
the accounts payable department
the receiving department
the vendor
the person preparing the purchase order

The purchase order will indicate a PO number, date prepared, company name, vendor name, name and phone number of a contact person, a description of the items being purchased, the quantity, unit prices, shipping method, date needed, and other pertinent information.

One copy of the purchase order will be used in the three-way match, which we will discuss later.

Receiving report

A receiving report is a company's documentation of the goods it has received. The receiving report may be a paper form or it may be a computer entry. The quantity and description of the goods shown on the receiving report should be compared to the information on the company's purchase order.

After the receiving report and purchase order information are reconciled, they need to be compared to the vendor invoice. Hence, the receiving report is the second of the three documents in the three-way match (which will be discussed shortly).

Vendor Invoice

The supplier or vendor will send an invoice to the company that had received the goods and/or services on credit. When the invoice or bill is received, the customer will refer to it as a vendor invoice. Each vendor invoice is routed to accounts payable for processing. After the invoice is verified and approved, the amount will be credited to the company's Accounts Payable account and will also be debited to another account (often as an expense or asset).

A common technique for verifying a vendor invoice is the three-way match.

Three-way match

The accounts payable process often uses a technique known as the three-way match to assure that only valid and accurate vendor invoices are recorded and paid. The three-way match involves the following:

Only when the details in the three documents are in agreement will a vendor's invoice be entered into the Accounts Payable account and scheduled for payment.

Good internal control of a company's resources is enhanced when the company assigns a separate employee with a specific, limited responsibility. The following chart illustrates the concept of the separation (or segregation) of duties involving accounts payable:

When the duties are separated, it will require more than one dishonest person to steal from the company. Hence, small companies without sufficient staff to separate employees' responsibilities will have a greater risk of theft.

To illustrate the three-way match, let's assume that BuyerCo needs 10 cartridges of toner for its printers. BuyerCo issues a purchase order to SupplierCorp for 10 cartridges at $60 per cartridge that are to be delivered in 10 days. One copy of the PO is sent to SupplierCorp, one copy goes to the person requisitioning the cartridges, one copy goes to the receiving department, one copy goes to accounts payable, and one copy is retained by the person preparing the PO. When BuyerCo receives the cartridges, a receiving report is prepared.

The three-way match involves comparing the following information:

The description, quantity, cost and terms on the company's purchase order.
The description and quantity of goods shown on the receiving report.
The description, quantity, cost, terms, and math on the vendor invoice.

After determining that the information reconciles, the vendor invoice can be entered into the liability account Accounts Payable. The information entered into the accounting software will include invoice reference information (vendor name or code, invoice number and date, etc.), the amount to be credited to Accounts Payable, the amount(s) and account(s) to be debited and the date that the payment is to be made. The payment date is based on the terms shown on the invoice and the company's policy for making payments.

Lastly, the documents should be stamped or perforated to indicate they have been entered into the accounting system thus avoiding a duplicate payment.

Vouchers

Some companies use a voucher in order to document or "vouch for" the completeness of the approval process. You can visualize a voucher as a cover sheet for attaching the supporting documents (purchase order, receiving report, vendor's invoice, etc.) and for noting the approvals, account numbers, and other information for each vendor invoice or bill.

When the vendor invoice is paid, the voucher and its attachments (including a copy of the check that was issued) will be stored in a paid voucher/invoice file. If paper documents are involved, an office machine could perforate the word "PAID" through the voucher and its attachments. This is done to assure that a duplicate payment will not occur.

The unpaid invoices and vouchers will be held in an open file.

Vendor invoices without purchase orders or receiving reports

Not all vendor invoices will have purchase orders or receiving reports. Hence, the three-way match is not always possible. For example, a company does not issue a purchase order to its electric utility for a pre-established amount of electricity for the following month. The same is true for the telephone, natural gas, sewer and water, freight-in, and so on.

There are also payments that are required every month in order to fulfill lease agreements or other contracts. Examples include the monthly rent for a storage facility, office rent, automobile payments, equipment leases, maintenance agreements, etc. Even though these obligations will not have purchase orders, the responsibility is unchanged: pay only the amounts that are legitimate and accurate.

Statements from vendors

Vendors often send statements to their customers to indicate the amounts (listed by invoice number) that remain unpaid. When a vendor statement is received the details on the statement should be compared to the company's records.

The fact that a company can be receiving both invoices and statements from a vendor means there is the potential of a duplicate payment. In order to avoid making a duplicate payment, companies often establish the following rule: Pay only from vendor invoices; never pay from vendor statements.

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The vendor invoices received by a company could involve the following:

A vendor invoice may be a bill for a repair or maintenance service. The vendor's credit terms allow the company to pay 30 days after the date of the service. Since repairs and maintenance do not create more assets, the cost of the service should be reported on the income statement as an expense. Under the accrual method of accounting the expense is reported in the accounting period in which the service occurred (not the period in which it is paid). Other examples of expenses include the cost of office expenses such as electricity and telephone, consulting, and more.
A vendor invoice may be a bill for the purchase of expensive equipment that will be used by the company for several years. The equipment will be recorded as an asset and will be reported in the company's balance sheet section property, plant and equipment. As the equipment is utilized, its cost will be moved from the balance sheet to the income statement account Depreciation Expense.
Another vendor invoice may be a billing for the cost of a service that the vendor will provide in the future, but the payment must be made in advance. A common example is an insurance company's invoice for the premiums covering the next six months of insurance on the company's automobiles. The company will initially debit the invoice amount to a current asset such as Prepaid Expenses. As the insurance expires, the cost will be allocated to Insurance Expense.

The following table illustrates an insurance premium of $6,000 that is paid in December but the coverage is for the following January 1 through June 30:

The three examples illustrate that some vendor invoices will be immediately recorded as expenses while other invoices are initially recorded as assets. The accounts payable staff needs to be instructed as to the proper accounts to be debited when vendor invoices are entered as credits to Accounts Payable. Generally, a cost that is used up and has no future economic value that can be measured is debited immediately to expense. Vendor invoices for property, plant and equipment are not expensed immediately. Instead, the cost is recorded in a balance sheet asset account and will be expensed in increments during the asset's useful life. Lastly, a prepaid expense is initially recorded in a current asset account and will be allocated to expense as the cost expires.

End of the Period Cut-Off

At the end of every accounting period (year, quarter, month, 5-week period, etc.) it is important that the accounts payable processing be up-to-date. If it is not up-to-date, the income statement for the accounting period will likely be omitting some expenses and the balance sheet at the end of the accounting period will be omitting some liabilities.

During the first few days after an accounting period ends, it is important for the accounts payable staff to closely examine the incoming vendor invoices. For example, a $900 repair bill received on January 6 may be a December repair expense and a liability as of December 31. Another vendor invoice received on January 6 may not have been an obligation as of December 31 and is actually a January expense.

It is also necessary to review the receiving reports that have not yet been matched to vendor invoices. If items were ordered and received prior to December 31, the amounts must be recorded as of December 31 through an accrual-type adjusting entry.

Note: The proper cut-off at the end of each accounting period becomes more complicated and often more significant if a company has inventories of finished products, work-in-process and raw materials. It is possible that some goods will be included in the physical inventory counts, but the costs have not yet been recorded in Accounts Payable and in the Inventory or Purchases account.

Accruing Expenses and Liabilities

At the end of every accounting period there will be some vendor invoices and receiving reports that have not yet been approved or fully matched. As a result these amounts will not have been entered into the Accounts Payable account (and the related expense or asset account). These documents should be reviewed in order to determine whether a liability and an expense have actually been incurred by the company as of the end of the accounting period.

Since the accrual method of accounting requires that all of a company's liabilities and expenses must be reported on the financial statements, companies should prepare an accrual-type adjusting entry at the end of every accounting period. This adjusting entry will credit Accrued Liabilities and will debit the appropriate expense or other account for the amounts that were incurred but are not yet included in Accounts Payable. The balance in Accrued Liabilities will be reported in the current liability section of the balance sheet immediately after Accounts Payable.

It is also common for companies to prepare a reversing entry every month. The reversing entry removes the previous period's accrual adjusting entry and prevents the double-counting of an expense that could occur when the actual vendor invoice is processed.

Note: Under the accrual method of accounting, a company's financial statements must report all expenses and liabilities that are probable and can be measured even if the vendors' invoices have not yet been received or fully processed.

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The general ledger accounts that are available for recording transactions are found in the company's chart of accounts. For most businesses the general ledger accounts are listed in the following order:

Balance sheet accounts
- Asset accounts
- Liability accounts
- Stockholders' or owner's equity accounts
Income statement accounts
- Operating revenue accounts
- Operating expense accounts
- Nonoperating revenue and gain accounts
- Nonoperating expense and loss accounts

Many systems will allow for each account to have subaccounts. Subaccounts allow for summarizing or combining amounts while also maintaining the detailed amounts.

When the existing accounts are not sufficient, new accounts should be added. In other words, meaningful financial reporting of transactions should not be limited to a preconceived list of accounts.

For more information and examples see Explanation of Chart of Accounts.

Invoice Credit Terms

The invoice terms indicate when an invoice becomes due and whether a discount may be taken if the invoice is paid sooner. The invoice terms also dictate the point at which ownership of goods will transfer from the seller to the buyer.

The following payment terms are some of the more common ones for businesses without inventories.

Net due upon receipt

If the vendor's terms are Net due upon receipt, the invoice amount is due immediately. (Of course, you should verify that the invoice is valid and accurate before it is entered for payment.)

Net 30 days

When the vendor invoice states Net 30 days, the amount of the invoice (minus any returns or allowances) is due 30 days from the date of the invoice. For example, if a vendor invoice for $1,000 is dated June 1 and the company is granted a $100 allowance, the net amount of $900 should be paid by July 1. (If there were no allowance, the company should remit $1,000 by July 1.)

1/10, n/30

When a vendor invoice includes terms of 1/10, n/30, the "1" represents 1% of the amount owed, the "10" represents 10 days, the "n" represents the word net, and the "30" represents 30 days. The terms 1/10, n/30 indicate that the buyer may take an early payment discount of 1% of the amount owed if the amount owed is remitted within 10 days instead of the normal 30 days. In other words, the buyer can choose either of the following:

Pay within 10 days and deduct 1% of the net amount owed (the invoice amount minus any authorized returns and/or allowances), or
Pay in 30 days and take no discount.

To illustrate1/10, n/30, let's assume that a vendor invoice for $1,000 is dated June 1 and the buyer does not return any of the goods. Since there are no returns, the net amount of the purchase is the full $1,000 and the buyer can remit either of the following amounts:

If paying by June 10, the amount due to the vendor is $990. [The net amount of $1,000 minus the $10 early payment discount (which is 1% of $1,000).]
If paying by July 1, the net amount of $1,000 is due.

If the buyer was given an allowance of $100, the net amount is $900. In that case the buyer can remit either of the following amounts:

If paying by June 10, the amount due to the vendor is $891. [The net amount of $900 minus $9 (which is 1% of $900).]
If paying by July 1, the net amount of $900 is due.

2/10, n/30

If the vendor's invoice has terms of 2/10, n/30, the "2" represents 2%, the "10" represents 10 days, the "n" represents the word net and the "30" represents 30 days. This means that the buyer can take an early payment discount of 2% of the amount owed if the amount is remitted within 10 days instead of the customary 30 days. In other words, the buyer can choose either of the following:

Pay within 10 days and deduct 2% of the net amount (invoice amount minus any authorized returns and/or allowances), or
Pay the full amount in 30 days with no discount.

To illustrate 2/10, n/30, assume that a vendor's invoice for $1,000 is dated June 1 and the vendor has granted the buyer an allowance of $100. This means the net amount is $900 and that only $900 will be eligible for the early payment discount. Hence, the buyer can remit either of the following amounts:

If paying by June 10, the amount due to the vendor is $882. [The net amount of $900 minus $18 (which is 2% of $900).]
If paying by July 1, the net amount of $900 is due.

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Some vendors offer an early payment discount such as 2/10, net 30. This means that the buyer may deduct 2% of the amount owed if the vendor is paid within 10 days instead of the normal 30 days. For instance, an invoice amount of $1,000 can be settled in full if the buyer will pay $980 within 10 days. In this example, the buyer will save $20 (2% X $1,000) for paying 20 days earlier than the normal due date. If the buyer has the opportunity to do this every 20 days, it would occur 18 times during a year (365 days divided by 20 days = 18 times). That means the company could save up to $360 ($20 X 18 times per year) each year by using a single $980 amount. Hence the annual percentage rate is approximately 36% ($360 earned divided by $980 used).

Looking at it another way, if the buyer had to borrow $980 from its bank for the 20 days at a borrowing rate of 6% per year, the interest for 20 days would be only $3.22 ($980 X 6% X 20/365). By paying $3.22 of interest to the bank, the buyer will save paying the vendor $20 and therefore will be better off by $16.78 ($20.00 minus $3.22). If this occurs 18 times in a year, the net annual savings will be approximately $301 [$16.78 X 18 times; or $360 per year saved minus the annual interest paid to the bank of $59 ($980 X 6%)].

A discount of 1% for paying 20 days early equates to an annual interest rate of approximately 18%.

It is clear that buyers with sufficient cash balances or a readily available line of credit should take advantage of the early payment discounts. However, some buyers are operating with very little cash and are unable to borrow additional money. These buyers may be wise to forgo the early payment discounts in order to avoid the risk of overdrawing their checking account. One overdraft fee could be greater than the early payment discount. If an overdraft causes several of the buyer's checks to be returned to its vendors, the total amount of overdraft fees will be even greater.

If a buyer's checks are returned because of insufficient funds its suppliers may become concerned about the buyer's ability to pay. This could lead to one or more of the suppliers demanding payment at the time of delivery. The elimination of 30 days of credit from suppliers could be devastating for a buyer with little money and a credit line that has been exhausted.

Be sure to consider your company's cash balances and cash needs before paying invoices prior to their due dates.

Other

Vendor or employee?

Occasionally an individual will provide services for a company and submits an invoice. The invoice is processed through accounts payable and in the U.S. the company may be required to issue the individual an IRS Form 1099-NEC in January of the following year.

While the company views the individual as an independent contractor, the Internal Revenue Service rules may dictate that the individual is actually a part-time employee. If a person is deemed to be an employee, the Internal Revenue Service requires that payroll taxes be withheld and a Form W-2 be issued instead of Form 1099-NEC.

You can learn more about the distinction between an independent contractor and an employee at www.IRS.gov.

Internal controls

In order to protect a company's assets it is important that a company have in place a variety of controls over issuing purchase orders, issuing checks, adding vendors to the accounts payable master vendor file, segregating duties, and other safeguards referred to as internal controls.

We recommend that a professional who is well-versed in internal controls perform a review of your company's policies and procedures.

Batching the payments to vendors

In order for the accounts payable staff to operate efficiently, it is helpful to process the checks written to vendors only on specified days each month. Writing the checks on pre-announced days will hopefully discourage the need for "rush" checks and allow the accounts payable processing to be more efficient.

Sales and use taxes

Certain purchases of goods and/or services may be subject to state sales taxes. If a sales tax is not paid for the sales-taxable goods or services (even from out-of-state vendors), the buyer is likely to be liable for a state use tax. To further complicate the situation, some organizations may be exempt from both a sales tax and a use tax depending on the state laws.

The responsibility for compliance with sales and use taxes rests with each company. As a result, companies must be familiar with the laws of the states in which they operate.

Travel and entertainment

Travel and entertainment, commonly known as T&E, is another area of accounts payable that needs to be managed. Here, too, each company must establish procedures and controls and be in compliance with Internal Revenue Service (IRS) rules which can be found at www.IRS.gov.

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The general ledger account Accounts Payable or Trade Payables is a current liability account, since the amounts owed are usually due in 10 days, 30 days, 60 days, etc. The balance in Accounts Payable is usually presented as the first or second item in the current liability section of the balance sheet. (Many companies report Notes Payable due within one year as the first item.)

As a liability account, Accounts Payable is expected to have a credit balance. Hence, a credit entry will increase the balance in Accounts Payable and a debit entry will decrease the balance.

A bill or invoice from a supplier of goods or services on credit is often referred to as a vendor invoice. The vendor invoices are entered as credits in the Accounts Payable account, thereby increasing the credit balance in Accounts Payable. When a company pays a vendor, it will reduce Accounts Payable with a debit amount. As a result, the normal credit balance in Accounts Payable is the amount of vendor invoices that have been recorded but have not yet been paid. The unpaid invoices are sometimes referred to as open invoices.

Accounting software allows companies to sort its accounts payable according to the dates when payments will be due. This feature and the resulting report are known as the aging of accounts payable.

Entering a vendor invoice into Accounts Payable

Prior to entering a vendor invoice into Accounts Payable, the invoice should be reviewed and approved. The reason is that a vendor invoice may contain errors (incorrect quantities, incorrect prices, math errors, etc.) and some invoices may not be legitimate.

After a vendor invoice has been approved, the recording of the invoice will include:

a credit to Accounts Payable, and
a minimum of one debit to another account. The debit amount usually involves one of the following:
- an expense (Repairs & Maintenance Expense, Advertising Expense, Rent Expense, etc.)
- a prepaid asset (Prepaid Expenses, Prepaid Insurance)
- a fixed or plant asset (Equipment, Fixtures, Vehicles, etc.)

A listing of the accounts that a company has available for recording transactions is known as the chart of accounts.

A report that lists the accounts and amounts that are debited for a group of invoices entered into the accounting software is known as the accounts payable distribution.

Reductions to Accounts Payable

When a company pays part or all of a previously recorded vendor invoice, the balance in Accounts Payable will be reduced with a debit entry and Cash will be reduced with a credit entry.

Accounts Payable is also debited when a company returns goods to a vendor or when the vendor grants an allowance.

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I was looking out for an online accounting course after a gap of 25 years. Luckily, I came across AccountingCoach. The very first visit to this site made me feel very comfortable. I felt as though it was made just for me. Very soon I enrolled myself as a PRO member. Now that I am able to access the entire site like the seminars, exams, crosswords and many many more interesting ways to learn accounting, my knowledge in accounting has deepened. I can confidently say to people who are new to this field, or who are trying for a refresher course like me, this is THE WEBSITE for you. It's a well-structured program, the most difficult accounting concepts have been explained in a very crystal clear fashion with beautiful real-life examples. Thanks to Mr Harold Averkamp and his dedicated team for sharing their deep insight.
-Sunita P.

The PRO membership is great ROI. For those who are looking to learn accounting, this is one of greatest accounting courses you'll ever find online.
-Karam T.

AccountingCoach helps me tremendously. I always find-up-to date the financial and accounting information needed. As I move into the next phase of my work life and career, AccountingCoach PRO will be an essential tool as I move from employee to business owner. Thank you for this very valuable tool which continues to evolve and grow.
-Diane J.

Thank you for being my reference book as I complete my accounting degree. I had no experience in accounting or bookkeeping before completing this degree and understandably I was in over my head! All the way over in New Zealand I came across your website, subscribed, hoping I may learn even a couple of things and have ended up using your website as my main reference tool. The quizzes, question and answer pages, the entire website is so user friendly and I know it will see me through to the completion of my degree. I can't thank you enough, please keep up the fantastic work!!!
-K.H.

I own a bookkeeping and tax business and I use AccountingCoach to train my bookkeepers. The value far exceeds the cost!
-Wendi

I currently teach Bookkeeping at one of the colleges in New York City. Being a member of AccountingCoach PRO has helped me tremendously. There is always something new to learn and teach. The price is very affordable. I have always encouraged my students to join the site. I'm glad to say that some have and they have really benefited from what AccountingCoach PRO has to offer.
-Marcia S.

I have been a member of AccountingCoach for many years now. I value the content and the easy-to-grasp manner in which the material is always explained. Many times I read the material here before studying it in my accounting book. I love AccountingCoach! They are very honorable as well. My membership continues to be valid after all these years. If I email them with questions about my membership or password or whatever else, they are always prompt to assist. I wish I had been a student of the founder of the site. He must have been a really wonderful professor!!! Thanks for putting all the work to create and maintain the site. You guys are the best!!
-Licia B.

Thank you AccountingCoach, you have helped me over the last 8 years of study and guided me to my dream job of becoming an accountant. I've answered and explained all the hard questions that I needed to get me where I am today and I certainly couldn't have done it without you! I will continue to use AccountingCoach PRO for the rest of my career. You are the best.
-Gillian L.

AccountingCoach PRO membership has assisted me in keeping my accounting and bookkeeping skills sharp over the years. My bookkeeping business has benefited greatly. The membership pricing is very reasonable and the information is easy to understand and apply. It has helped me explain difficult accounting concepts to many of my clients.
-Manch K.

AccountingCoach helped me during the times I had trouble remembering accounting concepts. It is a very useful website encompassing a broad area of accounting and finance. Definitely the best go-to place for accountants like me. Thank you so much!
-Cynthia A.

As a European I studied the accounting system used in my particular country. I always wondered how accounting was done in the U.S. AccountingCoach has taught me everything I wanted to know. I've learned a lot about the terminology and the differences between accounting methods from the other side of the pond.
-Pedro R.

I strongly believe that AccountingCoach is the best education program from a practical accounting point of view. Every tool like the accounting dictionary, crossword puzzles, word scrambles (I love it!) and so on explains difficult technical words with the most proper and simplest words Visual learning programs and Q&A archives are especially effective for non-native English speakers to understand current and practical usage methods of accounting terms.
-Ishino K.

Right after graduating from university and getting my bachelor's degree in accountancy, I didn't manage to land a job in the accounting field, instead I got a job in banking. While the pay was a little bit higher than what many other fresh graduates would get in the accounting field, I didn't particularly enjoy what I was doing. So I decided to give what I was most interested in to begin with another shot. Unfortunately, I wasn't feeling very confident in my ability and knowledge in accounting because there was a particularly long lapse of time where I wasn't exposed to accounting. Thankfully I discovered this website, which explains the basics of what you need to know about accounting in a very concise and rather layman way. I also really appreciate that the administrator of the website tries to improve and add more content to the site instead of stagnating after getting my money. I can definitely recommend this site if you need to refresh yourself with accounting, or even just to help you with your study if you're still in the process of getting your degree.
-Leonard L.

I am so impressed by AccountingCoach. I happened to stumble upon it when I was checking for an explanation on impairment. Ever since then my life has become uncomplicated and all these accounting books thrown out the window. It truly is the best! I could not believe it? I run my own accounting, bookkeeping practice and I am still today amazed about the way they have simplified things! I love it! Job well done to the team at AccountingCoach! I am your biggest fan! Thanks so much.
-Eleanor M.

I am a Granny of 67 years old, a South African National, studying for an undergraduate degree in Accounting. Coming across AccountingCoach was the best gift I ever received throughout my education pursuits. AccountingCoach is pleasantly user-friendly and a great study tool for senior citizens and those who study part time because of their busy work schedules. Even South African University students who are presently facing funding challenges in South Africa can use AccountingCoach as a study tool. Thank you.
-Jane N.

I am an experienced businessman now semi-retired and I guest lecture to senior managers in major UK companies and at academic institutions including some internationally famous business schools on topics such as Business Performance Measurement; Business Decision-Taking; and Assessing and Managing Risk. Although I understand business finance well, I never trained as an accountant. But to maintain high credibility when delivering my courses I need to be aware of and keep up to date with certain key international accounting standards and current accounting definitions and practices. I have found AccountingCoach to be an excellent way to do this and fantastic value for money.
-Ray O.

I am a small business accountant and tax preparer. A lot of my clients are do-it-yourself bookkeepers for their small business. Most of them, if not all, use bookkeeping software to keep track of their business. Although software programs are great at what they do and are "easy" for the user, the double entry accounting method is still occurring in the background. Accounting concepts and terms are not "easily" explained to a small business owner who doesn't understand why reports look the way they do. To help them, I always direct them to AccountingCoach to learn the concepts and terms. The tutorials, glossary, and web topics are presented in the best way that anyone can understand accounting. It's the best source on the web!
-Kathleen F.

Just want to let you know that I have learned so much from AccountingCoach PRO. I have had so many issues resolved simply by referring to AccountingCoach PRO when it comes to doing my everyday bookkeeping work. I am so glad that I discovered you and look forward to referring to this website a lot in the future...keep up the great work.
-Peggy M.

I teach Accounting and this is the first website I give my students. I too, purchased the lifetime membership because it is a valuable resource for them and for anyone desiring to learn and understand Accounting. I even do the crossword puzzles, word scrambles, etc. to keep my skills sharp! Plus, it's fun! It's a challenge to keep my lectures interesting, and AccountingCoach helps tremendously. Thanks!
-Crystal C.

I love, love, love your website, it has helped me to succeed in all the bookkeeping I have done off and on throughout the years. Whenever I had doubts I could easily access the website and find my answers quick and I love the videos. Very educational, accurate and reliable. The lifetime unlimited access was one of the best investments I have ever made a few years ago! Makes learning fun and I would suggest this to others in a heartbeat, business owners, employees won't be disappointed. Even those who do occasional bookkeeping will definitely be satisfied with any membership purchase. Thank you AccountingCoach for all that you have helped me with!!! Amazing site!!
-Brenda L.

I am not an accountant, nor a bookkeeper, but I need to be aware of what's happening financially. Being able to consult AccountingCoach on a specific topic relating to our books has been a tremendous help to me. I very much appreciate your service!
-Brian P.

I don't have enough words to express how great the AccountingCoach is. I have been using it since the first day I became a member and it's incredibly good.
-Manny S.

AccountingCoach assisted me with training my team on the profit and loss statements. It helped me put the 'why' behind the terminology used. I would highly recommend AccountingCoach as a good resource for all levels of users!
-Carolyn C.

AccountingCoach has helped me a lot with my work as a manager. It has given me confidence in reading and looking at spreadsheets and budgets as well as giving me the tools to interpret our financial status and forecast future expectations at my work. A great idea to have it readily available for all of us managers and professionals that need to brush up on their accounting knowledge or learn to enhance their professional standings and job status. Thank you for the videos and cheat sheets, as I appreciate a great effort on your part to all of us that need to learn and revise their accounting and finance information and knowledge.
-Samih B.

I bought a small Accounting, Bookkeeping & Payroll business and had very little knowledge of accounting principles and felt I was way over my head. I was looking online for free training or help with just the basics. After a few website that did not help, I found AccountingCoach and signed up and it has helped me a great deal! I am not sure if my business would be as successful if I did not pick up the lessons so easily. AccountingCoach really makes learning easy and interesting, which is hard to do when it comes to accounting. I have recommended it to friends & family and I will continue to do so. Thank you AccountingCoach!!!
-Jennifer L.

As a high school accounting teacher I have used the resources on AccountingCoach PRO to enhance my understanding of accounting concepts and make my explanation of concepts clearer for my students. I recommend AccountingCoach PRO to students pursuing higher level accounting after high school and to anyone teaching accounting classes---the money spent on this resource will be one of the best investments in professional development you'll make in your career.
-Sharon M.

The PRO membership allows me to provide great explanations to my coworkers who are not versed in accounting without me spending a lot of time finding examples they may understand. I use my membership to review topics that I don't use very often and it has been one of the best investments I've made for my work and it costs less than my Accounting textbook!
-John B.

AccountingCoach has helped tremendously while I was studying for accounting and I strongly believe that my grade would not have been in the 90's had it not been for the AccountingCoach. I will always keep the AccountingCoach in my favourites list even though I have completed my courses as I will no doubt make reference to it when I second-guess myself. It has helped with all aspects of accounting from the very beginning to the very end. Whomever decided to create AccountingCoach was a genius because it is designed in a way that anyone from an amateur to a PRO can follow along. I recommend it to everyone. It has become my new limb. Cannot boast enough about it. Well worth it.
-Tammy

Becoming a member of AccountingCoach was hands down a great decision for me. I have been in bookkeeping for over 16 years and all the training I had was from the CPA that I worked for. While I felt I had a good foundation and years of experience, once I took the leap and branched out with my own bookkeeping practice I felt the need to brush up on my skills. AccountingCoach actually not only helped me brush up on my knowledge, but has helped me pinpoint my strengths and weaknesses which allowed me to focus on those areas that I was lacking knowledge. It was also a great boost to see how much knowledge I already had. I think it was a great investment and I love knowing that when I second-guess myself I can easily log in and review the information needed. Worth every penny!
-Judith G.

Thank you AccountingCoach! As an auditor, I frequently encounter government and private financial transactions that I vaguely remember from my college years. The information and ease of finding the right accounting procedures to those instances has been an enormous help to me in my job. This has definitely been a good decision to be a member.
-Enrique E.

I came across AccountingCoach some years ago and since then it has been my go-to solution for all and any problems or issues that arise in my day-to-day work. Whenever I come across a situation I have not faced before I sign in, read up on the related data, of which there is plenty, and solve another problem. I think of AccountingCoach as my personal library where I can look up information on any aspect of my business. My clients are always impressed with the results I provide. Thank you AccountingCoach.
-Joseph C.

I started using AccountingCoach when I found myself unemployed and looking to brush up on my cost accounting skills. It was a wonderful tool and I found it easy to use and contained all the information I would need to get familiar with the topic, all while not having to go back to my college books or my CPA review materials. It is affordably priced and well worth investing in. I am now employed and the materials I studied helped me to prepare for questions I received in the interview process regarding topics I needed to brush up on.
-Karen B.

In my roles as a business owner, member of senior management teams and as a business consultant, I frequently deal with accounting-related issues. While I have a solid grasp of a wide range of accounting practices and methods, I still find that there are times when I want to refresh or investigate aspects of accounting that I either seldom visit or have not had the opportunity to work with. When those circumstances arise, I turn to AccountingCoach which I find covers not only a wide range of topics but usually in enough depth and detail that you can use it almost like a condensed primer on any given topic. The information and examples are complete enough that I find I can apply what is shown to the task at hand and have the result be equal to what I would get from an accounting professional. It is not an exaggeration to state that it has saved both time and cost on numerous occasions. Highly recommended!
-James F.

Living in a small tourist rural town, there are limited choices in the job market. I knew if I bumped up my skills, I would become eligible for a bookkeeping position locally. AccountingCoach has helped me do that. Such a small investment for a HUGE return. Thank you so much for making this available!
-Pam P.

I would like to say thank you very much for your support. I am a student of Accounting at George Mason University in Virginia. I found your website some time ago, and I have been a PRO member ever since. From the moment I found AccountingCoach, I recognize the value, quality and effort of your work. Currently, I am taking Financial Accounting. I confess I was scared because it has been awhile since I took accounting classes. Thankfully, AccountingCoach helps me to not just refresh my mind on basic accounting terminology, but also helps me to understand new terminology in plain English.
-Desire S.

I found AccountingCoach online about 2 years ago. It has helped me tremendously to brush up on knowledge and information about accounting that I don't have time to go to school for. I have been an accountant for many years and don't plan on going back to college at this point; I have a Bachelor’s degree already. I use AccountingCoach to study for a job in accounting if I am not familiar with the work or to understand something like cash flow statements when prepping for a job interview. Recently, I used the online exams extensively to study for a city accounting job; with great success. Thank you Harold!
-Mary B.

I have been using AccountingCoach in my bookkeeping business for a few years now and love it! There are times when I need an answer to some accounting situation that baffles me and always have been able to find the answers I need on your website. I particularly like the clear and concise way the material is presented so I can quickly get results.
-Cheryl N..

I enrolled in an accounting course online. I was sent textbooks and a workbook in the mail and that was it. I was on my own to figure out the rest. It was difficult trying to match the course and workbook together to do the lessons and exercises and the explanations left too many gaps and questions. I knew I needed extra support. I stumbled upon AccountingCoach in an internet search and from the little I was able to read, I gained a far better understanding than the college-level textbook I had been studying for months. I signed up for PRO and it got even better. I'm able to do more exercises and gain extra studying tools and more detailed explanations to ensure my understanding of the accounting process. Truthfully, I've learned more through the AccountingCoach Pro than the college textbook and it cost sooo much less! It has been a life saver. I don't think I could have continued without it. Thank you for creating such an amazing experience and giving me the confidence I needed to keep working towards my goal.
-Crystal C.

AccountingCoach is a simply fantastic self-learning source. The way it explains various accounting concepts in such a simple and self explanatory manner is really commendable. Being an engineering student, with no past accounting background, AccountingCoach has been a great saviour in my MBA accounting module. The Balance Sheets, Statement of Cash Flows, and Income Statement all have been explained very beautifully. Thank you AccountingCoach. Keep up the good work.
-Amber A.