Bookkeeping

While many do draw a salary, especially in the beginning stages when they are doing all the work, some hire managers to manage the business for them and, at that point, stop taking a salary. It is important to understand that the S corporation designation is merely a tax choice made to have your business […]

Then, divide that figure by the estimated useful life of the asset. Calculating the depreciating value of an asset http://ectaskforce.org/About_Us.htm over time can be tedious. Many accountants use a simple, easy-to-use method called the straight-line basis. It is most useful when an asset’s value decreases steadily over time at around the same rate. Moreover, the

This will be done over the next 12 years (15-year lifetime minus three years already). The recognition of depreciation expense is unrelated to cash flows, depreciation definition in accounting so it is considered a noncash expense. Instead, the only cash flows related to a fixed asset are when it is acquired and when it is

By contrast, higher D/E ratios imply the company’s operations depend more on debt capital – which means creditors have greater claims on the assets of the company in a liquidation scenario. Lenders and debt investors prefer lower D/E ratios as that implies there is less reliance on debt financing to fund operations – i.e. working

Due to the increasing cost of its materials, it concludes that LIFO will better indicate the company’s true profit. In the year of the change from FIFO to LIFO (and in years when comparisons are presented), the company must disclose the break in consistency. For the past 52 years, Harold Averkamp (CPA, MBA) has worked

Due to the increasing cost of its materials, it concludes that LIFO will better indicate the company’s true profit. In the year of the change from FIFO to LIFO (and in years when comparisons are presented), the company must disclose the break in consistency. For the past 52 years, Harold Averkamp (CPA, MBA) has worked

After unit variable costs are deducted from the price, whatever is left—​​​the contribution margin—​is available to pay the company’s fixed costs. For options trading, the breakeven point is the market price that an underlying asset must reach for an option buyer to avoid a loss if they exercise the the ecommerce guide to bookkeeping option.

A bank statement is often used by parties outside of a company to gauge the company’s health. A balance sheet explains the financial position of a company at a specific point in time. As opposed to an income statement which reports financial information over a period of time, a balance sheet is used to determine

A bank statement is often used by parties outside of a company to gauge the company’s health. A balance sheet explains the financial position of a company at a specific point in time. As opposed to an income statement which reports financial information over a period of time, a balance sheet is used to determine

This will give us the total dollar amount in sales that will we need to achieve in order to have zero loss and zero profit. Now we can take this concept a step further and compute the total number of units that need to be sold in order to achieve a certain level profitability with