By effectively managing your inventory you can have the right products in the right quantity on hand and avoid products being out of stock and funds being tied up in excess stock. You can also ensure your products are sold in time to avoid spoilage or obsolescence, or spending too much money on stock that’s taking up space in a warehouse or stockroom. One way to track the performance of a business is the speed of its inventory turnover. When a business (more…) […]
If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in did not occur. Depreciate the part of the new automobile’s basis that exceeds its carryover basis as if it were newly placed in service property. This excess basis is the additional cash paid for the new automobile in the trade-in. If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. The numerator of the fr […]
They are reported separately because this way users can better predict future cash flows – irregular items most likely will not recur. Revenue – Cash inflows or other enhancements of assets of an entity during a period from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major operations. It is usually presented as sales minus sales discounts, returns, and allowances. These include the net income realized from one-tim […]
Answers to common questions about e-filing an annual report are listed below. Using a balance sheet template will streamline the next step of the process, so that you don’t have to manually insert all of the fields yourself. This is a vital step towards understanding the core strength of a company, and to assess the business performance.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financia […]
A budget, also known as cash flow, is arguably more important than the actual cash that you have in your bank and investment accounts. A budget is a microeconomic concept that shows the trade-off made when one good is exchanged for another.
Cash budgets may cover a week or a month; sales and production budgets may cover a month, a quarter, or a year; and the general operating budget may cover a quarter or a year. The planning process that results in a formal budget provides an opportunity for […]
Understanding what employment records to store in a secure personnel file helps you avoid potential mistakes and fines. Later, we’ll provide a downloadable employee file folder checklist and personnel file checklist. Select a cross-section of employee personnel files to audit for compliance with workplace policies, and federal and state laws concerning record-keeping processes. Over 20 federal employment laws require some form of documentation and recordkeeping, and maintaining these reco […]
If you do end up with big shortages or overstock issues, address adjustments and valuations with your accountant to be sure they’re recorded correctly for tax purposes. Then, see if you can identify the problem—such as poor receiving practices, theft, or inaccurate purchases due to bad stock counts—and put the procedures covered here in place to prevent them in the future. Check each delivery against (more…) […]
It is calculated over a period of time and assesses the change in stock price against the net earnings retained by the company. Retained earnings are the portion of a company’s cumulative profit that is held or retained and saved for future use. Retained earnings could be used for funding an expansion or paying dividends to shareholders at a later date. Retained earnings are related to net income because it’s the net income amount saved by a company over time. (more…) […]
For assessing materiality of an item, accountants not only take into account the individual amounts but also the cumulative effect of all immaterial amounts. For example, each of fifteen items may be immaterial when considered by itself. However, the combined effect of fifteen items may be material when seen together. Practically speaking, an auditor can’t test every transaction, but he or she will conduct more extensive testing in areas that present a greater risk of material misstatemen […]
In the next column, list each account affected by the transaction on a separate line, and enter a short description of the transaction immediately below the list of accounts. The accounts being debited always appear above the accounts being credited, which are indented slightly. The posting reference column remains blank until the journal entry is transferred to the accounts, a process called posting, at which time the account’s number (more…) […]
