Category: Bookkeeping

Accurate accounting for returned merchandise is essential for financial reporting. When a customer returns a product, the business adjusts both sales and inventory accounts. Per Generally using the price to earnings ratio and peg to assess a…

Same as above, but the payments occur at the beginning of each period, not the end. You don’t need to be a finance nerd or an Excel wizard to use a present value table. Need to know…

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…