A customer receives an allowance as a retroactive discount when they notify a business about a small but noticeable flaw in a product. However, the timing of these transactions can also affect tax calculations. If returns and allowances are recognized in a different fiscal period than the original sale, this can complicate tax reporting. For … Read more
If the comparison year is year 3, then we will input the net income of year 3 and compute the percentage change between year 3 and year 1 (base year). With horizontal analysis, you uncover trends, spot red flags, and track progress like a pro. Learn how to use the Stockhistory function in Excel to … Read more
The accounting profession has addressed this situation with a mechanism to reduce the asset’s book value and to report the adjustment as an impairment loss. Over the life of the equipment, the maximum total amount of depreciation expense is $10,000. However, the amount of depreciation expense in any year depends on the number of images. … Read more
In double-entry accounting, every transaction has two sides (a debit and a credit) and the trial balance verifies that all transactions are recorded correctly. If the totals don’t match, that’s a sign that your books might contain a missed entry, typo, or misclassification. If it’s out of balance, something is wrong and the bookkeeper must … Read more
An accountant will enhance your ability to leverage critical business insights that will maximize returns and increase stability while reducing tax burdens. Update inventory records periodically to manage food cost control for waste reduction. Conducting periodic inventory audits serves to achieve precise cost control and reduce stock loss due to theft and spoilage. This means … Read more
Thus, you will always have a clear picture of your income and expenses. Bank reconciliation means comparing your business’s financial records with your bank statements to ensure they match. By organizing and maintaining your accounts receivable, we ensure you know when payments are due. We carefully track all invoices and follow up on payments to … Read more
Accountants receive a free version of QuickBooks designed specifically for them, called QuickBooks Online Accountant. You can exchange messages and share documents directly inside QuickBooks. All QuickBooks Online plans come with a one-time Guided Setup with an expert and customer support. Construction business billing methods For example, suppose your company uses progress billing on large … Read more
Retainers often offer better rates than hourly or one-off payments, saving costs in the long run. Providers gain a better understanding of client needs, leading to better results. For example, a person might pay an attorney a retainer for certain services. The attorney may learn information that retaining fee leads them to think they cannot … Read more
With an understanding of each of these terms, let’s take another look at the accounting equation. These elements are basically capital and retained earnings; however, the expanded accounting equation is usually broken down further by replacing the retained earnings part with its elements. They include cash on hand, cash at banks, investment, inventory, accounts receivable, … Read more
Journal bookkeeping entries in the accounting system are like making a note every time money comes in or goes out. For example, if a small business owner buys $100 worth of office supplies on credit, they write it down. This note includes the date, account names (like “Office Supplies” and “Accounts Payable”), and how much … Read more