Author: Anfisa Dmitrieva

Ott, Drawing for $500 and will credit Cash for $500. After this transaction, the business will have assets of $2,500 and will have owner’s equity of $2,500. The contra owner’s equity account used to record the current year’s withdrawals of business a…

In accounting terms, a company’s equity balance represents its net worth and may be calculated as a company’s total assets minus its total liabilities. The owner’s equity is recorded on the balance sheet at the end of the accounting period of the bus…

An overstated balance is an account balance that is reported as having a greater balance than it actually does, while an understated balance is one that is reported as having a lesser balance than it actually does. In this scenario, a character is se…

Fixed expenses are those that must be paid each month. These can include rent or mortgage payments, depreciation of assets, salaries and payroll, membership and subscription dues, legal fees and accounting costs….

Electronic withdrawals at ATMs are instantaneous, meaning your bank debits the amount of the withdrawal from your account at the time of the transaction. Nevertheless, ATM withdrawals, like check withdrawals, can lead to overdrafts and fees. While yo…

For example, overhead costs such as the rent for a factory allows workers to manufacture products which can then be sold for a profit. Overheads are also very important cost element along with direct materials and direct labor….

You may also see outstanding shares used as a variable in financial ratios, making them important for fundamental analysis. Buying back stock can also be an easy way to make a business look more attractive to investors. By reducing the number of outs…

If somebody fails to deposit or cash a check you wrote, they will have a hard time negotiating the check after six months. However, you still owe the money, and banks can choose to process the payment. A company’s general ledger account Cash contains…

The only type of Outsourcing that really occurred during this period was when companies hired external suppliers for ancillary services. Unaware of the possible benefits of outsourcing, this early Outsourcing only occurred because most organizations …

The vendors get connected to the manufacturers through a third party known as a supplier. A vendor is a party in the supply chain that makes goods and services available to companies or consumers. The term “vendor” is typically used to describe the e…