These produce or sell goods and services that are always in demand, like food and beverages, household products, and personal care products. It tells us how effective the company’s management has been in wringing profits from sales, and how much room the company has to withstand a downturn, fend off competition, and make mistakes. Corporate […]
However, a self-employed individual is not necessarily an independent contractor. The designer, an independent contractor, would do whatever job is set out in the agreement and bill the architectural firm (with whom they are contracted to work) either an hourly or flat rate for the work executed. To get paid what is owed, the designer […]
It ensures the balance sheet remains accurate while details are clarified or adjustments are made. These accounts are designed to temporarily hold mortgage payments that are either incomplete or cannot be immediately applied to specific portions of the loan, such as principal, interest, taxes, or insurance. A suspense account is a temporary account used in […]
Prepaid expenses are those paid in advance for goods or services to be received in the future. In cash basis accounting, these expenses are recognized when paid, whereas in accrual accounting, they should be recognized when the goods or services are received. Cash Basis Accounting is a method of bookkeeping where revenues and expenses are […]
While these drivers are commonly used, they are just general guidelines. There are situations where intuition must be exercised to determine the proper driver or assumption to use. Instead, an analyst may have to rely on examining the past trend of COGS to determine assumptions for forecasting COGS into the future. Please download CFI’s free […]
When Jane gets time and a half, her hourly rate increases to $18 per hour (12 x 1.5) for the extra hours she works. Don’t forget that this is the minimum figure, as laid down by law.An employer may choose a higher rate of overtime pay. Whatever it is, it has to fulfill national or […]
EcomBalance is a monthly bookkeeping service for eCommerce companies. EcomBalance handles your bookkeeping and sends you a Profit and Loss Statement, Balance Sheet, and Cash Flow Statement by the 15th of each month. EcomBalance also has a sister company, AccountsBalance, that caters to agencies, software companies, coaches, and other online companies. Quickbooks Online is more […]
The credit memo issued due to returned or damaged goods might require adjustments in the seller’s inventory levels to account for those items. This adjustment impacts the valuation and reporting of inventory on the seller’s balance sheet. To record a credit memo journal entry, debit your sales returns, and allowances account and credit your accounts […]
However, there’s no option to attach documents to transactions to share them with your accountant, so you’ll have to use your email or phone to send documents. This may not be a big deal for businesses that manage minimal transactions daily. Moreover, Wave uses bank-grade security measures to ensure that online data is secure. Small […]
Reconciling accounts and comparing transactions also helps your accountant produce reliable, accurate, and high-quality financial statements. One account will get a debit, and the other account will receive a credit for the same transaction. For instance, when a company conducts a sale, it debits either cash or accounts receivable on its bank statement balance sheet. […]