Bookkeeping

Non-cash add-backs increase cash flow as they are not actual outflows of cash, but rather accounting conventions. Compared to the indirect method, the direct method is simpler, as the formula comprises subtracting cash operating expenses from cash revenue. The less prevalent approach to calculating OCF is the direct method, which uses cash accounting to track …

Cash Flow From Operating Activities: Overview and Examples Read More »

Going concern is an accounting term for a company that has the resources needed to continue operating indefinitely until it provides evidence to the contrary. This term also refers to a company’s ability to make enough money to stay afloat or to avoid bankruptcy. If a business is not a going concern, it means it’s gone …

The going concern principle Read More »

On the other hand, incremental costs are future costs that are directly influenced by the decision at hand. When analyzing different options, businesses should focus on incremental costs rather than sunk costs to make rational and forward-looking decisions. The term incremental cost refers to the cost that the business incurs for producing an extra unit. …

What is an Incremental Cost? Definition Meaning Example Read More »

In either case, when a specific invoice is actually written off, this is done by creating a credit memo in the accounting software that specifically offsets the targeted invoice. Bad debt is debt that creditor companies and individuals can write off as uncollectible. Consider the success story of Yaskawa America, one of our clients, who …

How To Claim Bad Debt Losses On Your Taxes Read More »

That way, you can be well prepared when it’s time to file taxes with the IRS. Without any hiccups or last-minute scrambles, you’ll be able to enter tax season confidently. Online bookkeepers should also be available for virtual meetings so that you can ask questions, go over reports, and strategize for the future. Other popular …

8 Best Online Bookkeeping Services of 2024 Read More »

When you’re talking accounting and business, consignment refers to the consignment sale process. This process is specialized, and it requires its own accounting method. In the consignment process, goods are left with a third-party by a manufacturer or provider. From the consignee’s perspective, there is no need to record the consigned inventory, since it is …

Accounting for Consignment Inventory Definition, Treatment, Journal Entry, and Example Read More »

The T-account summary for Printing Plus after closing entries are journalized is presented in Figure 5.7. Notice that the Income Summary account is now zero and is ready for use in the next period. The Retained Earnings account balance is currently a credit of $4,665. Closing Entries It contains all the company’s revenues and expenses …

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There is also a book value used by accountants to value the assets owned by a company. This differs from the book value for investors because it is only used internally for managerial accounting purposes. While Book Value Per Share can be a helpful indicator of a company’s tangible net assets, it has several limitations …

Book Value Per Share BVPS: Definition, Calculation & Importance Read More »

The client can add new cash to the account or sell some holdings to raise the cash. An active investor with a cash account and zero cash available must also not buy security and then quickly sell it before a previous sale has settled to provide the necessary cash. The level of personal market knowledge …

What Is a Cash Account? Definition and What It’s Used For Read More »