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Bookkeeping & Write-up

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Bookkeeping & Write-up

Due To Due From

Asked Tuesday, August 26, 2025 by Theo

Hello, I have 2 companies with frequent inter-company transactions ranging from payments to vendors to xfers to cover payroll. Company A has both a Due to and Due From accnt for Company B and vice versa. I have been told that this is unnecessary and that I only need a Due To account and am able to record all transactions between the two companies under the Due To. Is this correct?

CPA Answer:

It isn't necessary to have both, but if you prefer to see them separated out like this it is fine. That is just an accounting preference. It is more important to make sure the Due to Company B on Company A matches the Due from CompanyA on Company B. The mistake with most inter-company loans is that a transaction is only recorded on one set of books and a deduction or revenue is missed. 

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Bookkeeping & Write-up

there is an over accrual that is still sitting in the liability for three years now.. if i want to reverse should I use relevant expense account?

Asked Monday, January 27, 2025 by Sasha

CPA Answer:

Do you mean the statement balance is higher than the book balance? If that is case, I would assume payments were applied in full to the liability and not allocated to interest expense. You would need to debit interest expense and credit the liability to fix.


If the liability balance is higher than the statement balance that would require more information. If the liability was used to purchase an asset, the asset value on the balance sheet could be incorrect. Another possibility is if the owner (assuming this is a small business passthrough entity) paid part of the original purchase out of personal funds and the contribution was never recorded. 

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Bookkeeping & Write-up

What is kiting a check ?

Asked Friday, January 12, 2001 by an anonymous user

CPA Answer:

Kiting refers to the practice of depositing and drawing checks at 2 or more banks and taking advantage of the time it takes for the 2nd bank to collect funds from the 1st bank. It also is a bookkeeping trick to illegally increase the face value of a check by changing the numbers on the check.
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Bookkeeping & Write-up

What is an accounts receivable aging schedule ?

Asked Thursday, January 11, 2001 by an anonymous user

CPA Answer:

An aging schedule is a table of accounts receivable broken down into number of day ranges (age categories) such as 0-30 days = 1 month, 30-60 days = 2 months, and 60-90 days = 3 months, The aging schedule is used to determine if customer payments are keeping close to schedule or late or possible uncollectable.
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Bookkeeping & Write-up

I live in Georgia , where do I file Employer's Quarterly Federal Tax Return 941 ?

Asked Thursday, December 28, 2000 by an anonymous user

CPA Answer:

If you are filing a form without a payment, mail Form 941 to IRS Cincinnati OH 45999-0005. If you are filing a form with a payment, mail Form 941 to IRS P.O. Box 804522 Cincinnati OH 45280-4522
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Bookkeeping & Write-up

What is the historical cost principle ?

Asked Wednesday, December 27, 2000 by an anonymous user

CPA Answer:

The historical cost principle requires that economic resources be recorded in terms of the amounts of money exchanged at that moment in time. When a transaction occurs, the exchange price is by its nature a measure of the value of the economic resources that are exchanged. This is in contrast to the fair market value which is the estimated value of the asset if sold on a specific moment in time.
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Bookkeeping & Write-up

What is the realization concept ?

Asked Wednesday, December 27, 2000 by an anonymous user

CPA Answer:

The realization concept states that a accounting transaction takes place only for those economic events to which the entity is a party. This principle rules out recognizing a gain based on the appreciated market value of a still owned asset. A gain or loss on a marketable security occurs only when sold, not on the daily fluctuation of the share price.
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Bookkeeping & Write-up

What is the matching principal ?

Asked Wednesday, December 27, 2000 by an anonymous user

CPA Answer:

The matching principle states that income is calculated by matching a period's revenues with the expenses incurred in order to bring about that revenue. The accrual concept is used to accomplish the matching principal. The bookkeeper will set up accruals of income earned but not received and expenses incurred but not paid to get a better matching of the company's income and expenses for a period.
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Bookkeeping & Write-up

What is the consistency criterion ?

Asked Wednesday, December 27, 2000 by an anonymous user

CPA Answer:

The consistency criterion states that the accounting procedures used at a given time should conform to the procedures previously used for that activity. Such consistency allows data of different periods to be compared. This is important for comparative financial statements such as the income sheet, balance sheet and cash flow statement. If there is a change in the consistency or accounting methods, the financial statements have to be restated for consistency purposes.
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