Definition:
Additions in accounting typically refer to increases in the value of assets or liabilities. It can also refer to the process of adding entries to a ledger or journal.
Here are some specific contexts where “additions” might be used:
- Asset additions: Increases in the value of assets, such as purchasing new equipment or property.
- Liability additions: Increases in liabilities, such as borrowing money or incurring new debts.
- Journal entries: The process of adding entries to a journal to record financial transactions.
- Adjusting entries: Entries made at the end of an accounting period to adjust account balances for items that have not yet been recorded or have been recorded incorrectly.
Example:
- Asset addition: A company purchases a new machine for $10,000. This would be recorded as an addition to the fixed assets account.
- Journal entry addition: A company records a sale of $1,000 on credit. This would be recorded as a debit to accounts receivable and a credit to sales revenue.
In general, “additions” in accounting refer to increases in the value of accounts or the process of adding entries to financial records.
