If a company were to take a bank loan of $10,000 in cash it would add cash to the cash account. So, it would be an addition of $10,000 to the cash item on the asset side of the balance sheet. This is a simplistic illustration of how a balance sheet gets balanced. To fully […]
Archivos de Categoría: Bookkeeping
If you know of one of these broad issues, report it to them at IRS.gov/SAMS. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter. The IRS uses the latest encryption technology to ensure that the electronic payments you make online, by phone, or from a mobile device using the […]
Typically, the mandated amount of par value is quite small, such as a penny per share, so the difference between the two concepts is essentially immaterial. Let’s assume that a share of common stock has a par value of $0.01 and is sold to an investor for $25. The corporation issuing the stock will debit […]
For examples of scrap value that is meant to be the disposal, residual, or salvage value of a plant asset, see our major topic Depreciation. The owner of a truck is told that the truck needs a new engine, which will cost $2,500. The owner can instead elect to sell the truck to a junkyard, […]
For example, if your rent is $1,000 per month and the tenant moves in on the fifteenth day of a month with 31 days, they would only owe $548.42 for that month. In this blog post, we’ll explain how to ensure you’re correctly accounting for the first and last month’s rent. We’ll also provide tips […]
You should consult your accountant when deciding on an accounting method. Accrual accounting also allows corporations to do more accurate long-range planning. It shows money slated to come in, which is helpful for organizations that issue credit up front and then bill customers. Additionally, it tracks upcoming costs, so companies can predict where and when […]
Common reasons the purchase price might be higher than fair value is because a company already has a recognizable brand name or a strong customer base. The United Kingdom equivalent of treasury stock as used in the United States is treasury share. Under the TSM, the options currently “in-the-money” (i.e. profitable to exercise as the […]
Ultimately, financial statements allow you to fully understand how your business is doing. They will help you make smarter decisions regarding revenue, expenses, assets, and losses. You’ll easily see new initiatives that could help you grow your business, and identify all the ways your money flows out of your company. Net income regarding the company’s earnings, gross profit means the total […]
Hence, 540 payments of $300 at 9% compounded monthly results in a total saving of $2,221,463.54 by the age of retirement. An annuity is a contract between you and an insurance company that’s typically designed to provide retirement income. You buy an annuity either with a single payment or a series of payments, and you […]
This approach helps highlight how much sales are contributing to long-term growth and profitability. The cash that the company receives should be recorded on the balance sheet as an asset account. Meanwhile, the deferred revenue must be reflected on the balance sheet as a liability account. The deferred revenue account is normally classified as a […]
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