Category: Bookkeeping

For example, if your business receives $10,000 worth of goods from a supplier who expects payment within the next month, the business has incurred a $10,000 expense. When you incur a debt, your creditor, lender or service…

There are several formulas for calculating the duration of specific bonds that are simpler than the above general formula. Note that modified duration is always slightly less than duration since the modified duration is the duration divided…

These laws vary by jurisdiction but aim to ensure fair treatment and working conditions for all workers. Recent updates in labor laws have strengthened safety regulations, reducing workplace injuries and improving overall job safety. In essence, blue-collar…

This approach helps prevent financial misstatements and compliance issues. Suspense accounts are temporarily classified as a balance sheet account, usually under the heading of current assets or current liabilities depending on the normal balance. Consequently at the…

Choose a template with the colors, fonts & text accounting sizes that are appropriate for your industry. – Managing CIP accounts require proper knowledge, experience, and advanced bookkeeping tools. That’s another reason why it is better to…

Secondly, when these post-tax profits are distributed among shareholders as dividends, the recipients must again pay tax on their personal returns. For instance, if a company like Money Makeover Inc. made a profit of $175,000 after all…

Stakeholders can read the par value of common stock and preferred stocks from the stockholder’s equity section of the balance sheet or other documents like the 10-K form. When shares of stocks and bonds were printed on…

A high gearing ratio means the company has a larger proportion of debt versus equity. Conversely, a low gearing ratio means the company has a small proportion of debt versus equity. In such instances, companies might have to work harder to reduce…

It encompasses the summarization, analysis, and reporting of financial data. Accountants use the data recorded by bookkeepers to produce financial statements, conduct financial forecasting, and provide insight into financial performance. They also ensure that business operations comply…

It is useful to note that the direct write-off method does not conform to the matching principle of accounting. Hence, we may not come across such a method in the company that follows acceptable accounting standards. In…