Category: Bookkeeping

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.…

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…

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…

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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An account might simply be named “insurance offset.” What does that mean? The bookkeeper would be able to tell the difference by the account number. An asset would have the prefix of 1 and an expense would have a prefix of 5. Organise account names into one of the four account category types Examples of…

Essentially, assets equals liabilities plus equity tells you how much money a business has avilable after all its debts have been paid off. This useful equation can be used to calculate financial ratios such as return on investment (ROI), debt-to-equity ratio, working capital ratio, and more. It can also be used to analyze how well…

Debt to equity ratio also affects how much shareholders earn as part of profit. With low borrowing costs, a high debt to equity ratio can lead to increased dividends, since the company is generating more profits without any increase in shareholder investment. If a bank is deciding to give this company a loan, it will…

Explicit costs include wages, leases, utilities, and the cost of raw materials while implicit costs include any opportunity costs, such as the loss of interest on an investment. Like economic profit, this figure also accounts for explicit and implicit costs. When a company makes a normal profit, its costs are equal to its revenue, resulting…