Accounting Tools

JULY 16, 2023

Related Courses Accounting for Intangible Assets Intangible Asset Valuation The Balance Sheet An intangible asset is a non-physical asset that has a multi-period useful life. The balance sheet aggregates all of a company's assets , liabilities , and shareholders' equity. However, this is not always the case.

Financial Statements 75

Financial Statements Accounting Accounting 75

Accounting Tools

JUNE 10, 2023

Related Courses Accountants' Guidebook GAAP Guidebook What is an Off Balance Sheet Liability? An off balance sheet liability is an obligation of a business for which there is no accounting requirement to report it within the body of the financial statements.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

MARCH 3, 2024

What is the Balance Sheet? A balance sheet lays out the ending balances in a company's asset , liability , and equity accounts as of the date stated on the report. The balance sheet is commonly used for a great deal of financial analysis of a business' performance.

Financial Statements 40

Financial Statements Financial Analysis Bookkeeping Accounting 40

Accounting Tools

JANUARY 19, 2024

Derecognition is the removal of a previously recognized financial asset or financial liability from an entity's balance sheet. If the risks and rewards of ownership have not passed to the buyer, then the selling entity must still recognize the entire financial asset and treat any consideration received as a liability.

Accounting 40

Accounting Accounting 40

Accounting Tools

MAY 6, 2024

The operating cash flow ratio measures the ability of a business to pay for its current liabilities from its reported operating cash flows. The best-case scenario is when the ratio reveals operating cash flows that are several multiples of the liabilities that must be settled. What is the Operating Cash Flow Ratio?

Accruals 40

Accruals Financial Statements Accounting Accounting 40

Accounting Tools

SEPTEMBER 24, 2023

Accrued vacation pay is the amount of time-off pay earned by employees , but not yet used by them. The amount of accrued vacation is a benefit to employees, and a liability to the employer. The accrued wages account is a liability account, and so appears in the balance sheet.

Payroll 40

Payroll Accounting Accounting 40

Accounting Tools

MAY 4, 2024

Related AccountingTools Courses Business Ratios Guidebook Key Performance Indicators The Interpretation of Financial Statements Liquidity Ratios The most-recognized liquidity ratio is the current ratio , which compares current assets to current liabilities. It compares all current assets except inventory to current liabilities.

Accounting 40

Accounting Accounting Financial Statements Accounts Receivable 40

Accounting Tools

SEPTEMBER 20, 2023

Related Courses The Balance Sheet The Interpretation of Financial Statements What is a Balance Sheet? The balance sheet is a report that summarizes all of an entity's assets , liabilities , and equity as of a given point in time. Accrued liabilities. Marketable securities. Prepaid expenses.

General Ledger 40

General Ledger Financial Statements Billing Accounts Payable 40

Accounting Tools

JULY 25, 2023

Related Courses Business Ratios Guidebook Key Performance Indicators The Interpretation of Financial Statements What are the Ratios for Analyzing a Balance Sheet? Balance sheet ratios compare the various line items on a balance sheet in order to infer the liquidity , efficiency , and financial structure of a business.

Accounts Payable 40

Accounts Payable Accounts Payable Accounts Receivable Accounts Receivable 40

Accounting Tools

NOVEMBER 26, 2023

If so, it wants to pay the current higher interest rate for the shortest period possible, and will then pay off the note and enter into a longer-term arrangement in the future, when interest rates are presumably lower.

Accounts Payable 40

Accounts Payable Accounts Payable Auditing Accounting 40

Accounting Tools

JUNE 16, 2023

Related Courses Accountants’ Guidebook GAAP Guidebook The Balance Sheet What is a Contingent Liability? A contingent liability is a potential obligation that may arise from an event that has not yet occurred. A contingent liability is not recognized in a company’s financial statements. They are noted below.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

SEPTEMBER 8, 2023

Related Courses The Balance Sheet The interpretation of Financial Statements What is a Current Liability? A current liability is an obligation that is payable within one year. Current liabilities may also be settled through their replacement with other liabilities, such as with short-term debt. Quick ratio.

Accounts Payable 40

Accounts Payable Accounts Payable Computation Deposits 40

Accounting Tools

DECEMBER 23, 2023

Depreciation , depletion , or amortization may be used to gradually reduce the amount of a noncurrent asset on the balance sheet. These tend to be assets that cannot be easily sold off, such as an investment in an apartment building or a shopping mall. An excessive amount of reduction in value may lead to an impairment charge.

Financial Statements 40

Financial Statements Computation Accounting Accounting 40

Accounting Tools

OCTOBER 14, 2023

If the borrower does not have the financial resources to pay off its debt holders, the holder of subordinated debt is at a heightened risk of not being paid. Presentation of Subordinated Debt Subordinated debt is stated on the issuer’s balance sheet as a long-term debt if it is payable in more than one year (which is likely to be the case).

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JULY 24, 2023

Record Intercompany Loans If the parent company has been consolidating the cash balances of its subsidiaries into an investment account, record intercompany loans from the subsidiaries to the parent company. Record Income Tax Liability If the company earned a profit, record an income tax liability. Make adjustments as necessary.

Financial Statements 75

Financial Statements Accounting Accounting Payroll 75

Accounting Tools

DECEMBER 20, 2023

For example, it is the stated amount of all equity listed on a company’s balance sheet, and is supposed to be indicative of the value of the business. However, the book value of an investment is marked to market periodically in an organization's balance sheet , so that book value will match its market value on the balance sheet date.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

OCTOBER 7, 2023

Liquidity Ratios Liquidity ratios compare the line items in the balance sheet , and measure the ability of a business to pay its bills in a timely manner. Chief among these ratios are the current ratio and quick ratio , which compare certain current assets to current liabilities.

Financial Statements 40

Financial Statements General Ledger Financial Analysis Customer Service 40

Accounting Tools

JANUARY 2, 2024

This is most commonly the case when managers want to hide the true extent of the liabilities of an organization, or that it has taken on an unusually large amount of risk that could lead to the incurrence of yet more liabilities.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

JULY 30, 2023

Also, it does not compare the timing of when current assets are to be liquidated to the timing of when current liabilities must be paid off. Also, it does not compare the timing of when current assets are to be liquidated to the timing of when current liabilities must be paid off.

Accounts Payable 40

Accounts Payable Accounts Payable Accounts Receivable Accounts Receivable 40

Accounting Tools

NOVEMBER 6, 2023

A bond sinking fund is an escrow account into which a company places cash that it will eventually use to retire a bond liability that it had previously issued. The implication is that company management is using its funds in a conservative manner, rather than pushing a liability further into the future.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

MARCH 7, 2024

An asset retirement obligation (ARO) is a liability associated with the eventual retirement of a fixed asset. The liability is commonly a legal requirement to return a site to its previous condition. Recognize any period-to-period increase in the carrying amount of the ARO liability as accretion expense.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

JUNE 14, 2023

The acid-test ratio compares a company’s most short-term assets to its short-term liabilities. How to Calculate the Acid-Test Ratio To calculate an organization’s acid test ratio, add together its cash, marketable securities and accounts receivable , and then divide by the total amount of current liabilities.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Financial Statements 40

Accounting Tools

AUGUST 27, 2023

Related Courses Business Combinations and Consolidations CPA Firm Mergers and Acquisitions Divestitures and Spin-Offs Mergers and Acquisitions What is Acquisition Accounting? However, most assets and liabilities should be measured as of the acquisition date. This fair value analysis is frequently done by a third-party valuation firm.

Accounting 40

Accounting Accounting CPA 40

Accounting Tools

AUGUST 8, 2023

Unemployment Tax The unemployment tax is used to bolster an unemployment compensation fund for laid off workers. Any tax liability not yet remitted to the government is reported within the current liabilities section of the balance sheet. These funds are administered at the state level.

Payroll 40

Payroll Tax Auditing Accounting 40

Accounting Tools

JUNE 10, 2023

The ratio compares an approximation of cash flows to liabilities , and is derived from the information stated in a company's income statement and balance sheet. The ratio will not be accurate to the extent that an organization does not recognize contingent liabilities. Who Uses the Solvency Ratio?

Financial Statements 40

Financial Statements Tax 40

Jetpack Workflow

MARCH 23, 2023

This article will share why having this checklist is important, the key items to include, and a free template to get you started. The two must have the same closing balances. These loans create a liability for the company appearing in its balance sheet. A checklist is essential during the monthly closing process.

Reconciling 52

Reconciling AR AP Payroll 52

Accounting Tools

SEPTEMBER 10, 2023

The general ledger, in turn, is used to aggregate information into the financial statements of a business; this can be done automatically with accounting software, or by manually compiling financial statements from the information in a trial balance report (which is a summarization of the ending balances in the general ledger).

General Ledger 40

General Ledger Financial Statements Record Keeping Bookkeeping 40

Accounting Tools

JUNE 10, 2023

A financially healthy business that does not pay dividends may have a large proportion of quick assets on its balance sheet , probably in the form of marketable securities and/or cash. Quick Ratio The total of all quick assets is used in the quick ratio , where quick assets are divided by current liabilities.

Financial Statements 40

Financial Statements Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

OCTOBER 13, 2023

The ratio is the relative proportion of an entity's current assets to its current liabilities , and shows the ability of a business to pay for its current liabilities with its current assets. Short-term” is considered to be any assets that are to be liquidated within one year, or liabilities to be settled within one year.

Financial Statements 40

Financial Statements Accounts Payable Accounts Payable Accounts Receivable 40

Accounting Tools

DECEMBER 22, 2023

The bond issuer writes off the full amount of the bond discount over the remaining term of the bond with which it is associated. The amount written off is charged to interest expense. The amount of the bond discount that has not yet been written off is called the unamortized bond discount.

Corporate Finance 40

Corporate Finance Financial Statements Accounting Accounting 40

Accounting Tools

JUNE 17, 2023

The seller may use its accounts receivable as collateral for a loan, or sell them off to a factor in exchange for immediate cash. This means that it still makes sense to extend credit to customers even when a portion of these sales must be written off as bad debts, as long as these sales still generate profits that exceed the bad debt losses.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Accounting 75

Accounting Tools

FEBRUARY 9, 2024

Working capital is the amount of an entity's current assets minus its current liabilities. A strongly positive working capital balance indicates robust financial strength, while negative working capital is considered an indicator of impending bankruptcy. This information can be found on an organization’s balance sheet.

Accounts Payable 40

Accounts Payable Accounts Payable Accounts Receivable Accounts Receivable 40

Accounting Tools

AUGUST 27, 2023

Related Courses Business Combinations and Consolidations CPA Firm Mergers and Acquisitions Divestitures and Spin-Offs Mergers & Acquisitions What is the Acquisition Method of Accounting? However, most assets and liabilities should be measured as of the acquisition date. Under GAAP, some intangibles cannot be recognized as assets.

Accounting 40

Accounting Accounting CPA 40

Accounting Tools

AUGUST 28, 2023

Related Courses Business Combinations and Consolidations CPA Firm Mergers and Acquisitions Divestitures and Spin-Offs Mergers & Acquisitions How to Value an Acquisition Target Acquisition valuation involves the use of multiple analyses to determine a range of possible prices to pay for an acquisition candidate.

CPA 75

CPA Collections Accounting Accounting 75

Accounting Tools

SEPTEMBER 10, 2023

Inventory is not included in the ratio, since it can be quite difficult to sell off in the short term, and possibly at a loss. This is a particularly useful ratio when a business is facing difficult financial circumstances, and needs to pay off a substantial amount of liabilities in the near term. Accrued liabilities.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Financial Statements 40

Nanonets

MAY 8, 2023

Start your free trial Accounts receivable (AR) is an asset on a company's balance sheet. It is recorded on the company's balance sheet as an asset since it represents money the company owes and will eventually receive. The former represents an asset, while the latter represents a liability.

Accounts Receivable 52

Accounts Receivable Accounts Receivable Account Receivables AR 52

Less Accounting

JUNE 15, 2023

In this article, we’ll walk you through the essential steps of accounting for your construction business. By the end of this article, you’ll have a solid understanding of how to manage your finances effectively, allowing you to focus on growing your business and achieving your goals.

Financial Statements 52

Financial Statements Accounting Accounting Budgeting 52