Category: Bookkeeping

The aging method also makes it easier for management to make changes in credit policies and discounts offered to customers. Also, generating the report before the month ends will show fewer receivables whereas, in reality, there are more pending receivables. Management should match their credit terms to the periods of the aging reports to get an accurate presentation of the accounts receivable. The allowance method estimates bad debt expense at the end of the fiscal year, setting up a reserve…

Thus, the cash flow statement (CFS) or footnotes section are recommended financial filings to obtain the precise value of a company’s depreciation expense. The double declining method (DDB) is a form of accelerated depreciation, where a greater proportion of the total depreciation expense is recognized in the initial stages. Depreciation is a non-cash expense that allocates the purchase of fixed assets, or capital expenditures (Capex), over its estimated useful life. Suppose, however, that the company had been using an accelerated…

If it has a salvage value, then the depreciable base is the amount you paid minus the salvage value. To help you get a sense of the depreciation rates for each method, and how they compare, let’s use the bouncy castle and create a 10-year depreciation schedule. You divide the asset’s remaining lifespan by the SYD, then multiply the number by the cost to get your write off for the year. That sounds complicated, but in practice it’s pretty simple,…

Your bookkeeper reconciles your accounts, categorizes your transactions, and produces your financial statements. They also make adjustments to your books to ensure they’re accurate and tax-compliant. Occasionally your bookkeeper might need your input on things like categorizing a transaction properly, but we try our best to make bookkeeping as hands-off as possible for you. You can also book a call with your bookkeeper (or send them a message) whenever you’d like. There’s no extra fee or hourly charges for support—we’re…

In addition, though, you are entitled to fixed dividend payments, like a bond’s fixed interest payments. Some common stock may also offer dividends, but these are normally at lower rates and are more likely to be foregone if a company has a hard quarter or year. While preferred stocks’ dividends are not guaranteed like bond interest payments, they are much less likely to be waived. The total value of assets reported on a company’s balance sheet only reflects the cost…

This adjustment allows companies to minimize their and the shareholders’ contractual obligations, as par value carries a binding contract between an organization and its shareholders. Par value, also known as nominal or original value, is the face value of a bond or the value of a stock certificate, as stated in the corporate charter. Par value is required for a bond or a fixed-income instrument and shows its maturity value and the dollar value of the coupon, or interest, payments…

Our partners cannot pay us to guarantee favorable reviews of their products or services. Andrew is an Audit & Assurance managing director with Deloitte & Touche, LLP, based in Nashville, TN. With more than 15 years of experience at Deloitte, Andrew currently focuses his efforts on leading audit engagements as well as cross-functional advisory and implementation projects for clients across Tennessee. Andrew completed a two-year rotation in Deloitte’s National Office Accounting Services group with a specific focus on revenue recognition…

In this article, you’ll learn more about accountancy degrees, different types of them, and the jobs you can land as a degree holder. To comment on this article or to suggest an idea for another article, contact Jeff Drew at -cima.com. For instance, he wanted to expand the profession into services beyond audit and tax compliance — a change that seems obvious today, but that was met with resistance early on. With the new president’s support, Rothberg canvassed the corporate world…

You don’t get any more revenue from that client for the rest of the year. That really doesn’t reflect reality, because you still need to deliver that service for the rest of the year. With accrual accounting, you would recognize $10,000 of that revenue each month. Customer payment confirmation So, for example, if your customer signs a big contract, you’d consider the money earned, even if they haven’t paid you yet. This method is more complex, but it allows you…

Come join us for a fun filled evening and get all your tax questions answered. We will have pizza for fuel and you will walk away from this event with all your important tax questions answered. It’s important to keep detailed records of all these expenses as they can significantly lower your taxable income. In this comprehensive guide to accounting for photographers, you’ll get the information you need to set up your business for accounting success. Next, we ensure compliance…