Business

The general public and business people are familiar with the general accounts that appear in the financial statements, yet many owners, executives, and other non-accounting personnel often ignore the lesser known accounts that are called Contra Accounts. To understand the concept of contra account I review also the concept of normal balance, and the 3 rules of accounting.

All accountants know several terms that create basis for any accounting system. Such terms are T-account, debit and credit, and double entry accounting system. Of course, these terms are studied by accounting students all over the world.

Since the name of the game in business is positive cash flow each month to pay your business expenses (employees, biz tools, your salary, biz materials and so on), the most envied concept for every business owner is the idea of passive income or also commonly called residual income. Passive Income essentially means money that you are paid month after month or year after year for work you did once.