Category: Bookkeeping

We can compute this using our average calculator, by hand, or by using a hand-held calculator since all the values have equal weights. Weight average also called weighted mean is helpful to make a decision when there are many factors to consider and evaluate. Each of the factors is assigned some weights based on their…

It might be labeled as “ending cash balance” or “net change in cash account.” Cash flow is also considered to be the net cash amounts from each of the three sections (operations, investing, financing). This section records the cash flow from capital expenditures and sales of long-term investments like fixed assets related to plant, property, and equipment.…

Although it may sound counterintuitive, one of the main benefits of outsourcing accounting is that it can actually save your business money. Yes, virtual and outsourced bookkeeping is just as legitimate as in-house bookkeeping and accounting. However, as with any in-person accounting professionals you’d trust with your financial data, you should always verify a bookkeeping…

Nabil invests $10,000 cash in Apple in exchange for $10,000 of common stock. Shareholders, or owners of stock, benefit from limited liability because they are not personally liable for any debts or obligations the corporate entity may have as a business. Shareholders’ equity comes from corporations dividing their ownership into stock shares. Assets include cash…

As we discussed above, FIFO results in a higher gross profit during periods of rising prices. However, if a company used LIFO during a period of rising prices, gross profit would be lower. The key takeaway here is that when you’re calculating the cost of goods sold or ending inventory using periodic FIFO, the date…

This is one the classic crossed transactions that occurs in marriage. Instead of the Respondent’s Adult responding with “I think they’re on the desk”, it is the Respondent’s Child that responds back. In this example, Sally’s Adult reached the conclusion that data in her Parent was valid. Her Parent had been taught “always turn pot…

For example, a loan would go under liabilities since you’ll have to pay it back later. Amounts owing on credit cards, funds that need to be paid to vendors, or payment terms on a vehicle or item of equipment you purchased also count. Assets refer to anything physical and non-physical that your company owns. This…

Please contact an accountant, attorney, or financial advisor to obtain advice with respect to your business. As such, a $40,000 discrepancy due to the missing transactions should be noted in the reconciliation, and an adjusting journal entry should be recorded. This guide covers basic manufacturing accounting terms you should know and what to look for…

While future value tells you how much a series of investments will be worth in the future, present value takes the opposite approach. It calculates the current amount of money you’d need to invest today to generate a stream of future payments, considering a specific pv of annuity table interest rate. But annuities can also…

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