Accounting Tools

MARCH 26, 2024

Disadvantages of Direct Credit There is little room in a direct credit transaction for additional information about the nature of a payment, so this detail may be sent to the payee separately in a remittance advice. Terms Similar to Direct Credit A direct credit is also known as direct deposit.

Deposits 40

Deposits Accounting Accounting 40

Accounting Tools

APRIL 12, 2024

In this environment, assets and liabilities are priced better, since buyers and sellers have full knowledge about transactions. This informs market participants about the level of supply and demand, which can impact prices. A transparent market arises when market participants have full access to pricing information.

Financial Reporting 40

Financial Reporting 40

Accounting Tools

FEBRUARY 23, 2024

Shortly thereafter, it sheds most of its divisions during a major downsizing and no longer needs about 90% of the floor space in the headquarters building. Related AccountingTools Courses Accountants' Guidebook GAAP Guidebook Related Articles Estimated Liability Examples of Liabilities Indirect Liability Provision

Financial Statements 75

Financial Statements Accounting Accounting 75

Accounting Tools

MARCH 29, 2024

This inclusion of overhead costs gives management better information about how to set prices for the goods being sold, as well as to determine the fully-burdened profit margin on each product. If the overhead application rate is based on actual fixed costs incurred, then the amount of overhead applied should match the amount incurred.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

DECEMBER 18, 2023

The Purpose of Substantive Testing Substantive testing is intended to provide the auditor with a reasonable level of assurance about the correctness and validity of a client’s financial reporting, or to spot possible material misstatements.

Auditing 75

Auditing Financial Statements Financial Records Accounts Payable 75

Accounting Tools

MAY 4, 2024

The scrap value concept is used to make current decisions about whether to scrap or repair an asset, while salvage value is a theoretical concept used to determine a periodic depreciation rate. Related AccountingTools Courses Accounting for Inventory How to Audit Inventory

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

MAY 7, 2024

Related AccountingTools Courses Business Ratios Guidebook Key Performance Indicators The Interpretation of Financial Statements Advantages of Using Performance Measurements There are several advantages to using performance measurements, which are as follows: Feedback loop. Management emphasis. Employee performance.

Financial Statements 40

Financial Statements Collections Accounts Receivable Accounts Receivable 40

Accounting Tools

FEBRUARY 26, 2024

Related AccountingTools Courses Accountants’ Guidebook Bookkeeper Education Bundle Bookkeeping Guidebook Comparing the General Ledger and Trial Balance There are a number of differences between the general ledger and trial balance, which are as follows: Amount of information. Nature of information.

General Ledger 75

General Ledger Bookkeeping Financial Statements Auditing 75

Accounting Tools

JANUARY 18, 2024

A journal voucher is a document on which is stored the essential information about an accounting transaction. What is a Journal Voucher? This voucher contains a unique identifying number, the transaction date, transaction description, and transaction amount.

Bookkeeping 40

Bookkeeping Auditing Accounting Accounting 40

Accounting Tools

MAY 9, 2024

A business does not want to reveal too much about itself through the MD&A, since its competitors may be reading this document. This is a discussion and analysis section, so management can put its spin on the numerical information presented elsewhere in the financial statements. Not explanatory. Not necessarily accurate.

Financial Statements 40

Financial Statements Financial Reporting Accounting Accounting 40

Accounting Tools

JANUARY 24, 2024

Each of them uses a letter-based rating system that informs investors about the financial stability of a debt issuer. Related AccountingTools Courses Corporate Finance Treasurer's Guidebook Related Articles Credit Analysis Credit Insurance Five Cs of Credit

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MAY 7, 2024

Calculation of Proved Reserves The calculation of the reserve only applies when the following criteria are present: The oil and gas is from known reservoirs Production can proceed under existing economic conditions Existing operating methods can be used Production is feasible under existing government regulation Production can be completed before the (..)

Accounting 40

Accounting Accounting 40

Accounting Tools

MAY 7, 2024

Related AccountingTools Courses The Balance Sheet The Income Statement The Interpretation of Financial Statements The Statement of Cash Flows Financial Statements Do Not Contain Some Intangible Assets Many intangible assets are not recorded as assets. This mostly applies to long-term assets, such as fixed assets.

Financial Statements 70

Financial Statements Auditing Accounting Accounting 70

Accounting Tools

FEBRUARY 13, 2024

Related AccountingTools Course Accounting for Retirement Benefits Related Articles Accounting for Pensions Actuarial Cost Method Actuarial Gains and Losses Actuarial Present Value If the estimates are conservative, it is more likely that the business making reasonable amounts of contributions to its pension fund.

Accounting 40

Accounting Accounting Financial Statements 40

Accounting Tools

MARCH 5, 2024

For example, a company might set aside a reserve to pay for an expected adverse judgment in a lawsuit that is about to be settled. Related AccountingTools Courses Bookkeeper Education Bundle Bookkeeping Guidebook Related Articles Reserve Accounting The Allowance Method What is an Allowance?

Bookkeeping 40

Bookkeeping Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

MARCH 8, 2024

This is a benefit for the collections staff, since uncollectible items are being purged from the accounts receivable report - which they use to determine which customers to call about overdue invoices.

Collections 40

Collections Accounting Accounting Accounts Receivable 40

Accounting Tools

APRIL 24, 2024

For example, a business could report that it had a $500,000 loan as of the balance sheet date, but this would not be considered complete unless additional information about the loan were provided, such as its maturity date. This also means that no information is omitted that might have led a user to have a different opinion of the business.

Financial Statements 40

Financial Statements Financial Reporting Bookkeeping Accounts Receivable 40

Accounting Tools

DECEMBER 30, 2023

The information on a check stub is used by the recipient to match cash receipts against invoiced amounts in the recipient’s accounting system , and so reduces the volume of calls back to the accounting department, asking about the nature of payments made.

Accounts Payable 40

Accounts Payable Accounts Payable Invoicing Bookkeeping 40

Accounting Tools

JANUARY 18, 2024

Fair market value is the price that two parties are willing to pay for an asset or liability , if both parties are well-informed about the item in question, neither one is under pressure to buy or sell, and there is no time pressure to complete the deal. What is Fair Market Value?

Tax 40

Tax Accounting Accounting 40

Accounting Tools

DECEMBER 20, 2023

For example, no member of the management team can express an opinion about the value of the business. During this period, no new information can be offered to the public than is not already contained within the registration statement.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

APRIL 15, 2024

Related AccountingTools Courses Business Ratios Guidebook The Interpretation of Financial Statements How to Calculate Cash Return on Assets The measure is usually derived in aggregate for an entire business, in which case the calculation is to divide the total average assets into the cash flow from operations.

Accruals 40

Accruals Financial Statements Accounting Accounting 40

Accounting Tools

FEBRUARY 5, 2024

This is an issue when a business initially reports a contingent asset, and then neglects to update its status; this can result in subsequent financial statement disclosures that mislead readers because they do not reflect the latest information about the asset.

Financial Statements 40

Financial Statements Bookkeeping Accounting Accounting 40

Accounting Tools

JANUARY 9, 2024

In both cases, the intent is to provide readers with a best guess about what a full year of financial results would look like, given the presence or absence of certain events. Similarly, pro forma statements can include the results of a recent acquisition as though it had occurred earlier, as of the beginning of the year.

Financial Statements 40

Financial Statements Invoicing 40

Accounting Tools

APRIL 9, 2024

The ongoing cost of this activity is about $500 per month. Related AccountingTools Course Fixed Asset Accounting Related Articles Extraordinary Repairs Major Repairs Ordinary Repairs Here are several scenarios for repair and maintenance activities: Routine maintenance. Dry-dock maintenance.

Accounting 40

Accounting Accounting 40

Accounting Tools

APRIL 17, 2024

Related AccountingTools Courses Accounting for Vineyards and Wineries Agricultural Accounting Example of the Accounting for Raised Crops A farm raises wheat as its principal crop. One field has just been harvested, and the market value of that wheat is $42,000.

Accounting 40

Accounting Accounting 40

Accounting Tools

JANUARY 21, 2024

Instead, the cashier can access the bank's website to download information about the nature of the checks received by the bank. Related AccountingTools Courses Corporate Cash Management Treasurer's Guidebook Related Articles Remote Bank Deposits (podcast) Deposit in Transit Deposit Slip

Deposits 40

Deposits Accounting Accounting 40

Accounting Tools

DECEMBER 19, 2023

Related AccountingTools Courses Bookkeeping Guidebook CFO Guidebook New Controller Guidebook Classification The results of the efforts of the preceding accountants are accumulated into a set of accounting records, of which the summary document is the general ledger.

General Ledger 75

General Ledger Accounting Accounting Financial Statements 75

Accounting Tools

APRIL 25, 2024

From the perspective of the borrower, there is a strong incentive to keep customers from knowing about any factoring arrangements, since factoring gives the appearance of the business having shaky finances. Variations on Invoice Factoring There are several variations on the factoring concept, which are noted below.

Invoicing 40

Invoicing Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

APRIL 7, 2024

Customers are especially interested in a company’s financial statements when it is a smaller one or a start-up business; in both cases, there may be uncertainly about whether the firm can continue as a going concern.

Financial Statements 40

Financial Statements Billing Accounting Accounting 40

Accounting Tools

DECEMBER 26, 2023

Related AccountingTools Course Fiduciary Accounting Trustee Responsibilities A trustee has a number of responsibilities. Similarly, the trustee must make decisions about where to invest excess funds. First, a trustee must take on the role of a fiduciary, managing assets on behalf of the grantor. What is the Role of a Trustee?

Tax 40

Tax Accounting Accounting 40

Accounting Tools

NOVEMBER 24, 2023

The letter asks the customers to respond to the auditor only if they find a discrepancy between their records and the information about the client company's financial records that are supplied by the auditor. A negative confirmation is a document issued by an auditor to the customers of a client company.

Auditing 40

Auditing Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

DECEMBER 13, 2023

Another option is to periodically attend accounting conferences to learn about the latest practices. As a final example, an accounting department should always use the same depreciation method for the same class of fixed assets , to ensure consistency in the derivation of depreciation expense.

Accounting 75

Accounting Accounting Financial Statements QuickBooks 75

Accounting Tools

DECEMBER 22, 2023

This means that clients do not need to worry about making major expenditures for large software upgrades, with the attendant bother of installing these systems. Finally, many ASPs can accommodate rapid increases or decreases in the number of client employees accessing their system.

Accounting Software 40

Accounting Software Accounting Accounting 40

Accounting Tools

MARCH 5, 2024

Restrict the Granting of Credit Debt collection begins with a decision about how much easy credit a company wants to grant its customers. This is a management decision that should involve a discussion about the impact on bad debts and the investment in accounts receivable.

Collections 40

Collections Invoicing Accounts Receivable Accounts Receivable 40

Accounting Tools

DECEMBER 12, 2023

This can include meetings with key client personnel in order to learn more about targeted areas. This plan incorporates the team’s decisions about the extent to which the client’s system of controls can be relied upon.

Auditing 40

Auditing 40

Accounting Tools

FEBRUARY 15, 2024

A cost object is anything about which a business wants to collect cost information, such as processes, customers, products, product lines , and geographic sales regions.

Customer Service 40

Customer Service Budgeting Collections Cost Accounting 40

Accounting Tools

FEBRUARY 13, 2024

Related AccountingTools Courses Business Ratios Guidebook Credit and Collection Guidebook Effective Collections How to Interpret Days Sales Uncollected An unusually high figure in proportion to the standard days allowed to pay indicates either an issue with lax credit standards or inadequate collection activities.

Collections 40

Collections Accounts Receivable Accounts Receivable Account Receivables 40