Business Accounting Blog

The guidelines are outlined in the generally accepted accounting principles , which all publicly traded companies in the U.S. have adopted. Professionals pursuing accounting careers should understand the overlaps between financial accounting and managerial accounting.

While the focus of managerial accounting is internal, the focus of financial accounting is external, with a focus on creating accurate financial statements (more…) […]

There are different formulas—meaning, different ratios—you can use according to which financial statement you’re analyzing. Liquidity ratios show the ability to turn assets into cash quickly.
However, like all other ratios, the metric has to be analyzed in terms of industry norms and company-specific requirements. The numbers contained in financial statements need to be put into context so that investors can better understand different aspects of the company’s operations. Ratio anal […]

Before your invoice is approved, ensure it goes through the accounting department for review and verification. Additionally, we recommend you check each invoice properly before approving it. If you don’t have a robust bookkeeping team, outsource your accounting and bookkeeping work to a reliable firm that delegates duties and executes controls for you. Enforce robust and consistent review and approval processes across the firm to ensure everyone follows the same rules.

Also referred to a […]

He is the sole author of all the materials on AccountingCoach.com. Fixed assets such as real estate, heavy machinery, furniture, vehicles, etc. All of the above ratios and metrics are covered in detail in CFI’s Financial Analysis Course. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench ass […]

The calculation of depreciation expense follows the matching principle, which requires that revenues earned in an accounting period be matched with related expenses. The company can also scrap the equipment for $10,000 at the end of its useful life, which means it has a salvage value of $10,000. Using these variables, the accountant calculates depreciation expense as the difference between the cost of the asset and its salvage value, divided by the useful life of the asset. This results in a to […]

For example, when you take out a business loan, you increase your liabilities account because you’ll need to pay your lender back in the future. You simultaneously increase your cash assets because you have more cash to spend in the present.
The journal is a chronological list of each accounting transaction and includes at a minimum the date, the accounts affected, and the amounts to be debited and credited. Another example might be the purchase of a new computer for $1,000. In this examp […]

Earnings per share is a measure that compares a company’s net income compared to the outstanding shares. The price-to-earnings ratio, or P/E ratio, is another commonly used metric that factors in the company’s stock price in relation to EPS. The income statement is a historical record of the trading of a business over a specific period . It shows the profit or loss made by the business – which is the difference between the firm’s total income and its total costs. Common size i […]

Select the account to reconcile from the drop-down box and enter your statement information. Click the “Continue” button to open the Reconcile window, and then select the “Hide Transactions After the Statement’s End Date” check box. Because the balance account is a liability, enter a negative statement amount. A business line of credit provides flexible financing for ongoing and one-time expenses. If you use your credit card for an online transaction, either print […]

Although companies usually support a bring your own device policy, just as for network security, it can present problems. Terumi Laskowsky is an internationally-recognized information security consultant and founder of Pathfinder Japan.

This is because internal controls include all of the company’s IT assets, including computers, hardware, software, and all other electronic devices that have access to financial data. The Sarbanes-Oxley Act of 2002, sponsored by Paul Sarbanes and Michael […]

Harold Averkamp has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Shipping ManagementGet to know A-to-Z about shipping including its types, important terms, and costs. You have too little information –Since the inventory is only counted physically, that also after a while, there is limited and lapsed information you are gathering. (more…) […]