BACKCHARGE Definition

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BACKCHARGE is to charge a person or a firm an amount of money in order to make adjustments for a previous transaction.

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ENTITY ASSUMPTION is the assumption that financial statements are prepared for an entity that is separate and distinct from its owners.

 

OPEN BALANCE EQUITY is an account that is automatically created by QuickBooks whenever a company is created.  It is an equity account similar to Retained Earnings or Owner Capital. The Open Balance Equity account is basically a "plug" account used by QuickBooks to balance a transaction (basic accounting debits=credits). QuickBooks will enter a balance in the Open Balance Equity account for two reasons: beginning account balances or forced adjustments.

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