Category: Bookkeeping

Finding net sales will help you create an income statement, a valuable planning tool for anticipating your income and expenses. An income statement is a financial statement that reveals how much income your business is making and where it is going. The net sales figure on an income statement shows how much revenue remains from gross sales… Continue reading total sales activities: acme inc bought 350 items on 16 speedy cleaners returned 75 items on 18 repco inc. bought 500

For this example, the important assumption or assumptions being determined is that the next quarter’s target income is that dollar sales of $250,000 and fixed costs are estimated to be $150,000. At this point, the company will earn sufficient revenue to cover all the fixed costs. Target profit is the desired profit that a business wants to… Continue reading Achieving Target Profit: Strategies and Analysis Techniques

This is common in pre-orders, custom-built products, and high-demand items. Since they overlap perfectly, you can debit the cash journal and credit the revenue journal. The cash flow statement shows what money flows into or out of the company. In this situation, unearned means you have is unearned service revenue a debit or credit received… Continue reading Unearned Revenue: Definition and How to Record It

If an organization holds shares to earn income from property, it may be considered to have a profit purpose, even if the income from those shares is used in furtherance of the organization’s not-for-profit objectives. Financial management for a nonprofit comes with its unique challenges. It’s not just about accurate recordkeeping—it’s about ensuring every dollar… Continue reading Statement of Financial Position: Overview of Nonprofit Net Assets

Managerial accounting looks inward, delivering customized analyses that help leaders run the business effectively. Whether you’re leaning toward cost vs. management accounting, grow your career by earning your CMA certification. Your interests should guide you down are you choose between cost vs. management accounting. Vaia is a globally recognized educational technology company, offering a holistic… Continue reading Managerial Accounting Definition, Objectives & Techniques

The APV method is more flexible and can accommodate changes in the financing and the interest rate over time. Properly using tax shields as allowed by law should not increase your chances of an depreciation tax shield audit. However, aggressive tax planning or incorrectly claiming deductions can raise red flags. Always ensure your deductions are… Continue reading Tax Shield: How to Estimate the Tax Shield of Your Projects

Generally, a Form W-8 remains valid for three calendar years following the signing date. For instance, if you sign Insurance Accounting a Form W-8BEN on September 15, 2024, it typically remains valid through December 31, 2027, unless your circumstances change. Income from transactions with a broker or a barter exchange is subject to reporting rules… Continue reading What is W8, W8BEN, or W8 tax form

However, some states allow corporations to issue shares with no par value. If a state requires a par value, the value of common stock is usually an insignificant amount that was required by state laws many years ago. If the common stock has a par value, then whenever a share of stock is issued the… Continue reading How Is the Stockholders’ Equity Section of a Balance Sheet Different From a Single-Owner Business?

Explore how closing dividends accounts influences retained earnings and affects financial statement accuracy. Corporations reinvest their profits because they expect to earn a significant return on their investments and grow as a result. If a corporation is distributing nearly all its profits, then management has deemed that it is better of in the hands of… Continue reading Stock Dividends and Splits Financial Accounting

For investors and analysts, the level of cash and cash equivalents on a company’s balance sheet provides valuable insights into its liquidity and ability to weather financial storms. A healthy cash position signifies stability and flexibility, while insufficient cash reserves may signal financial vulnerability. A certificate of deposit is a type of savings account with… Continue reading Cash and cash equivalents definition