Business Accounting Blog

See my articleAssessing Audit Control Risk at High and Saving Time. The company’s goal is to create financial statements without material misstatement. If an auditor’s initial risk assessment is revised, the auditor is required to modify planned audit procedures or design new procedures. In summary, if an audit is the main course, then risk assessment is the appetizer.

Regardless of the amount and type of substantive testing they perform, the auditors (more…) […]

These include adjustments for depreciation, amortization, “mark to market” accounting, and the Lower of cost or market rule. Inventories and some securities holdings contribute to Balance sheet values for current assets. Current assets figures, in turn, play a central role in several important metrics for evaluating company performance and financial position.

Asset values, therefore, impact “metrics” such as working capital, current ratio, and return on assets. The foll […]

In other words, profit increases of the investee would increase the investment value, while losses would decrease the investment amount on the balance sheet. The equity method requires the investing company to record the investee’s profits or losses in proportion to the percentage of ownership. Shareholder equity is the owner’s claim after subtracting total liabilities from total assets.
They must also include any share capital and retained earnings in the equation. Equity financing […]

The paper also mentions the overall effect that litigations involving CPAs have had on the profession of accountancy. The operating procedures of the FASB, comprising the roles and responsibilities of the Chairman, the organization of the technical staff of the Board, the roles and responsibilities of the various advisory groups, the Emerging Issues Task Force , and allied public forums. The critical task of setting account standards in the world’s most dynamic economy is the responsibili […]

Your property is qualified property if it is one of the following. If there is a sale or other disposition of your property before you can use the full amount of any outstanding carryover of your disallowed section 179 deduction, neither you nor the new owner can deduct any of the unused amount. In addition, figure taxable income without regard to any of the following. $740,000—The dollar limit less the cost of section 179 property over $2,590,000. (more…) […]

If money is placed in a savings account with a guaranteed interest rate, then the FV is easy to determine accurately. However, investments in the stock market or other securities with a more volatile rate of return can present greater difficulty.

This means that interest is paid on interest earned in previous periods. Will only really be accurate if the interest rate stays the same and the initial investment is unchanged. Changes in the economic environment, like fluctuations in the value of a […]

This page explores the skills and education necessary to become a bookkeeper, including tips for career development. Bookkeepers and accountants both keep track of a company’s financial transactions. Accountants focus more on interpreting data, while bookkeepers focus on storing the data. Generally, accountants have more schooling than bookkeepers to help them interpret reports and determine the financial health of a business. Many accountants gain experience working as bookkeepers to lea […]

Return on investment measures the efficiency of an investment, including the amount of return on an investment relative to its cost. Accountants can also use ROI to compare the efficiency of more than one investment. To calculate ROI, subtract the cost of investment from the current value of investment, and divide that by the cost of the investment. A popular metric, ROI helps investors choose the best investment opportunities. On credit, also called on account, is an agreement for an individua […]

If you voided it with the bank, the bank should reject the check when it is presented. If you did not void it with the bank, then you must record the check with a credit to the cash account and a debit to indicate the reason for the payment .
For example, if a company receives $900 on Saturday, June 29, the debit to the Cash account will show the date of June 29, even if the money is deposited in the bank account on Tuesday, July 2.You’d notice this as soon as (more…) […]

Depreciable assets can range from office furniture and machinery to property. Two common methods of depreciation are straight-line and declining balance. The method used to calculate depreciation depends on the expected life of the asset and the goals of using a depreciation method. The most common types of depreciation methods include straight-line, double declining balance, units of production, and sum of years digits. The depreciation expense is based on a portion of the company’s tang […]