If it is worth less than carrying value on the books, the asset is considered impaired. If it has risen in value, no change is made to historical cost. In the case of impairment, the devaluation of an asset based on present market conditions would be a more conservative accounting practice than keeping the historical …
The main difference between the current and quick ratios is that the quick ratio excludes existing assets, such as inventory, as they cannot be as easily converted to cash. Current assets are highly liquid assets such as cash, inventory, and accounts receivables. Liquidity ratios are accounting metrics used to determine a debtor’s ability to pay …
Where high-yield savings accounts give you the chance to earn more interest on your money, they do come with limitations. For example, savings accounts don’t come with check writing privileges and many don’t come with a debit card. These accounts also typically don’t offer bill pay features, which makes sense considering they’re meant to help …
How to Benchmark Your Accounting Performance and Practices Leer más »
Essentially, liquidity refers to the ability of a business to convert its assets to cash quickly. If a company uses debt financing, it is borrowing money from a firm and will pay interest for doing so. In equity financing, a business’ owners sell a portion of the organization in exchange for extra working capital. A …
Three Tips For Managing Your Small Business’s Cash Flow Leer más »
4) Audit & ComplianceHands down, some of the most critical accounting activities are related to regulatory compliance and auditor requests. Manually tracking and complying with controls in the reconciliation process can lead to a lack of visibility, and ultimately end up costing further time and money. 3) RiskThere’s a lack of assured accuracy when it …
If a third-party company experiences mismanagement or bankruptcy, it may disrupt your accounting services and affect vendor relationships. However, with outsourced accounting, you work with providers usually equipped with cloud-based systems and automation capabilities that offer uninterrupted services. While they were traditionally in-house functions, an increasing number of businesses today outsource their finance and accounting …
Outsourced Accounting, Bookkeeping, and Payroll Services QXAS USA Leer más »
It is calculated as the average sales price multiplied by the number of units sold. Revenue is the gross income (top-line figure) from which costs are subtracted to ascertain net income. It is known as the top line because it appears first on the company’s income statement. Revenues are an income account in a company’s …
Is Revenue a Debit or Credit? Your Ultimate Guide on Accounting for Revenues Leer más »
The reason to pass these adjusting entries is only that of the timing differences, which is simply when a company incurs an expense or earns revenue and when they receive cash or make payment for it. Another example of an expense accrual involves employee bonuses that were earned in 2019, but will not be paid …
Understanding the Basics: Accrual Vs Deferral in Accounting Leer más »
The customer may be given a 30-day payment window due to his excellent credit and reputation, allowing until Oct. 28 to make the payment, which is when the receipts are accounted for. Prior period financial information is presented along side current period’s financial results to facilitate comparison of performance over a period. The top section …
For example, consider a person who invests $10,000 in a company’s stock, then sells that stock for $12,000. When an investor incurs a loss, the ROI is expressed as a negative number. To obtain CPA licensure, a candidate must meet eligibility criteria and pass a demanding four-part standardized exam. Eligibility standards include at least 150 …