Accounting Tools

MAY 13, 2024

The working ratio compares the operating expenses of a business to its revenue. How to Calculate the Working Ratio The calculation of the working ratio is to divide total annual operating expenses, not including depreciation , by annual gross revenue. Does not use net revenue. What is the Working Ratio? Uses the wrong baseline.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

FEBRUARY 15, 2024

What are Revenues? Revenues are the fees generated from the sale of goods and services, and are recognized when the seller’s earnings process has been completed. Under the cash basis of accounting , revenues are recorded when cash is received from a customer in payment of these items. Or, it could sell an asset for cash.

Accruals 75

Accruals Accounts Receivable Accounts Receivable Account Receivables 75

Xero

JANUARY 24, 2024

New Zealand’s Inland Revenue sets a GST due date for each month. Pro tip: set reminders on your business calendar so you don’t forget these dates when things get busy! How GST due dates work All GST-registered businesses in New Zealand have deadlines for when they need to pay GST. Not registered for GST?

XERO 227

XERO Record Keeping Invoicing Bookkeeping 227

RevCycle

MARCH 20, 2024

These facilities, often the sole source of medical care for miles around, face unique challenges in maintaining financial margins and collecting patient revenue. This equates to fewer patients seeking services, leading to a direct decline in revenue. This disparity between lower revenue and higher expenses creates a significant burden.

Collections 92

Collections Billing Revenue Cycle 92

Accounting Tools

APRIL 17, 2024

What is Second-Order Revenue? Second-order revenue is sales that are indirectly generated by an initial customer purchase. This revenue can come from a variety of activities, such as customer referrals, repeat purchases from original customers, or even customers changing employers and buying the product again at their new employer.

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Accounting Tools

APRIL 9, 2024

What is a Revenue Center? A revenue center is a distinct operating unit of a business that is responsible for generating sales. For example, a department store may consider each department within the store to be a revenue center, such as men's shoes, women' shoes, men's clothes, women's clothes, jewelry, and so forth.

Accounting 40

Accounting Accounting 40

Accounting Tools

OCTOBER 11, 2023

An expense is an incurred cost that has been consumed in order to earn revenues. A loss is a reduction in value that is not related to earning revenue. Related Articles The Difference Between Expense and Expenditure The Difference Between Expenses and Payments What are Losses?

Bookkeeping 75

Bookkeeping 75

Accounting Tools

MAY 13, 2024

Related AccountingTools Courses Managerial Economics Revenue Management Revenue Recognition How to Calculate Price Elasticity Elastic demand can be calculated by dividing the percentage change in unit demand by the percentage change in price. Revenue should be maximized when you can set the price to have an elasticity of exactly 1.

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Accounting Tools

JULY 13, 2023

Revenue expenditures are for costs that are related to specific revenue transactions or operating periods, such as the cost of goods sold or repairs and maintenance expense. Revenue expenditures are charged to expense in the current period, or shortly thereafter.

Computation 75

Computation Bookkeeping Budgeting Tax 75

Counto

MARCH 20, 2024

Cash Basis Accounting Cash basis accounting revolves around timing – recording revenue and expenses based on when money exchanges hands. Downsides of Cash Accounting: Limited Insight: Doesn’t reflect accrued revenue or outstanding expenses accurately. Let’s delve into the differences, benefits, and downsides of each method.

Accruals 52

Accruals Accounting Accounting Accounts Payable 52

Accounting Tools

OCTOBER 21, 2023

Related Courses Bookkeeping Guidebook How to Audit Revenue Revenue Recognition What is Deferred Gross Profit? Related Articles Deferred Credit Deferred Revenue Unearned Revenue Unrecorded Revenue

Accounts Receivable 74

Accounts Receivable Accounts Receivable Account Receivables Bookkeeping 74

CSI Accounting & Payroll

OCTOBER 13, 2023

If your construction company has a contract that rolls into a new year , you must accrue for the materials, revenue, and labor involved in the contract - even if you use cash basis accounting for your business. This article will walk you through classifying your contracts and business to determine whether CCM or PCM is right for you.

Accruals 98

Accruals Accounting Accounting Payroll 98

Counto

APRIL 10, 2024

Through an example, imagine your company’s financials look like this : Revenue: $500,000 Expenses: $200,000 Profit (or chargeable income after tax adjustments): $300,000 Under the PTE, your company benefits from: A 75% exemption on the first $10,000 of chargeable income, equaling a $7,500 exemption.

Tax 98

Tax Corporation Tax Bookkeeping Accounting 98

Accounting Tools

MAY 7, 2024

Responsibility Center Reporting Another form of performance measurement is the use of revenue centers, profit centers, and cost centers to report the results of business segments. Related Articles Accounting Ratios Activity Ratios Efficiency Ratios Operating Performance Ratios

Financial Statements 40

Financial Statements Collections Accounts Receivable Accounts Receivable 40

Accounting Tools

FEBRUARY 26, 2024

What is the Unit of Revenue Method? The unit of revenue method is a technique used in the oil and gas industry for charging capitalized costs to expense, using the ratio of current gross revenue to future gross revenues.

Accounting 40

Accounting Accounting 40

Accounting Tools

MARCH 22, 2024

To accrue means to record revenues or expenses in the accounting records that have not yet been entered. In essence, revenue is accrued if it has not yet been billed to the customer, while expenses are accrued when no billing from the supplier has yet been received. What is Accrue in Accounting?

Accruals 40

Accruals Billing Accounting Accounting 40

Accounting Tools

DECEMBER 22, 2023

Related AccountingTools Courses Bookkeeping Guidebook How to Audit Revenue Revenue Recognition Accounting for a Customer Advance For these reasons or others, a seller may receive an advance payment before it has done anything to earn the payment. Revenue recognition. Two journal entries are involved.

Accounting 75

Accounting Accounting Reconciling Bookkeeping 75

Accounting Tools

FEBRUARY 28, 2024

Why Revenues are Credited The reason why revenues are credited is that they increase the shareholders' equity of a business, and shareholders' equity has a natural credit balance. When a sale occurs, the revenue (in the absence of any offsetting expenses) automatically increases profits - and profits increase shareholders' equity.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Bookkeeping 40

Accounting Tools

JANUARY 22, 2024

Accumulating a profitable and recurring group of customers is the primary goal of a business, since this group generates revenue for the business. Related Articles Customer Master File A customer is an entity that buys goods or services from third parties.

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Accounting Tools

DECEMBER 28, 2023

Items classified within this area are an entity’s primary revenue -producing activity, so cash flows are generally associated with revenues and expenses. Related AccountingTools Course The Statement of Cash Flows Related Articles Cash Flows from Operating Activities Examples of Operating Expenses

Collections 75

Collections Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

MAY 12, 2024

This set of sequential, interrelated activities is known as the sales cycle , or revenue cycle. Related Articles Full Cycle Accounting Recording Transactions The Transaction Approach Also, a company issues stock to investors in exchange for periodic dividend payments and other payouts if the entity is dissolved.

Petty cash 72

Petty cash Revenue Cycle Purchase Order Accounting 72

Accounting Tools

SEPTEMBER 9, 2023

The calculation of net operating income is to subtract all operating expenses from the revenues generated by a specific property. Related Articles Pros and Cons of Real Estate Investing A high net operating income figure should result in a higher property valuation.

Tax 75

Tax Management Accounting Accounting Accounting 75

Accounting Tools

NOVEMBER 26, 2023

Revenue and Cost Analysis Revenue and cost information from a company's income statement can be arranged on a trend line for multiple reporting periods and examined for trends and inconsistencies. Extend revenue and expense line items into the future for budgeting purposes, to estimate future results.

Financial Analysis 75

Financial Analysis Financial Statements Expense Reports Budgeting 75

Accounting Tools

OCTOBER 1, 2023

Examples of Nominal Accounts and Real Accounts Nominal accounts are typically associated with the income statement , and so are used to record revenues , expenses , gains , and losses. Examples of these accounts are product revenue, the cost of goods sold , compensation expense, and utilities expense.

Accounting 76

Accounting Accounting Bookkeeping Accounts Payable 76

Accounting Tools

APRIL 24, 2024

Contribution margin analysis investigates the residual margin after variable expenses are subtracted from revenues. How to Calculate Contribution Margin Contribution margin is revenues minus all variable expenses. The outcome is then divided by revenues to arrive at a percentage contribution margin.

Financial Analysis 40

Financial Analysis Financial Statements 40

Accounting Tools

JULY 20, 2023

Net income is the revenues recognized in a reporting period, less the expenses recognized in the same period. This amount is generally calculated using the accrual basis of accounting , under which expenses are recognized at the same time as the revenues to which they relate.

Accruals 75

Accruals Deposits Financial Analysis Financial Statements 75

Accounting Tools

JUNE 15, 2023

It is used to give managers specific responsibility for revenues generated, expenses incurred, and/or funds invested. Revenue Center A revenue center is solely responsible for generating sales. A typical revenue center is the sales department. These centers are usually stated on a firm’s organization chart.

Financial Statements 75

Financial Statements Financial Reporting Accounting Accounting 75

Accounting Tools

OCTOBER 24, 2023

Intercompany Revenue and Expenses For intercompany revenue and expenses, a business eliminates the sale of goods or services from one entity to another within the group. This means that the related revenues , cost of goods sold , and profits are all eliminated. Related Articles Intercompany Accounting

Financial Statements 76

Financial Statements Accounting Accounting 76

Accounting Tools

JULY 26, 2023

Accruals Concept Revenue is recognized when earned, and expenses are recognized when assets are consumed. This concept means that a business may recognize revenue, profits and losses in amounts that vary from what would be recognized based on the cash received from customers or when cash is paid to suppliers and employees.

Financial Statements 76

Financial Statements Accruals Accounting Accounting 76

Accounting Tools

SEPTEMBER 7, 2023

The income summary account is a temporary account into which all income statement revenue and expense accounts are transferred at the end of an accounting period. Shift all $10,000 of revenues generated during the month to the income summary account: Debit Credit Revenue 10,000 Income summary 10,000 2.

General Ledger 75

General Ledger Accounting Accounting Account Reconciliation 75

Accounting Tools

OCTOBER 8, 2023

Statement of Activities The statement of activities quantifies the revenues and expenses of a nonprofit for a reporting period. These revenues and expenses are broken down into the “Without Donor Restrictions” and “With Donor Restrictions” classifications that were referred to earlier for the statement of financial position.

Financial Statements 75

Financial Statements Auditing Accounting Accounting 75

Accounting Tools

APRIL 14, 2024

A budgeting fund is an annual compilation of the projected revenues and expenditures for a government fund. Related AccountingTools Courses Budgeting Capital Budgeting Governmental Accounting Related Article Governmental Accounting What is a Budgeting Fund?

Budgeting 40

Budgeting Accounting Accounting 40

Accounting Tools

SEPTEMBER 7, 2023

Revenue is the gross amount recorded for the sale of goods or services. Conversely, the amount of revenue reported in the income statement is only for the current reporting period. The net reported amount of the gross receivable and the allowance is the amount of receivables outstanding that management actually expects to collect.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Accounting 75

Accounting Tools

OCTOBER 4, 2023

Profitability arises when the aggregate amount of revenue is greater than the aggregate amount of expenses in a reporting period. The net profit ratio compares after-tax profits to revenues, while the earnings per share ratio presents profits on a per-share basis. Related Articles Profitability Index Profitability Ratios

Accruals 75

Accruals Financial Statements Tax Accounting 75

Accounting Tools

APRIL 16, 2024

Related AccountingTools Courses Revenue Management Revenue Recognition Related Articles List Price Optimal Price Price Point Price Setter Price Taker This visual presentation is useful for understanding the size and scope of the discounts being granted to customers.

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Accounting Tools

OCTOBER 12, 2023

The direct write-off method is not the best approach, because the charge to expense may occur several months after you recorded the related revenue , so there is no matching of revenue and expense within the same period (the matching principle ). If so, the unpaid portion of the debt should still be classified as a bad debt.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Accruals 75

Accounting Tools

JULY 8, 2023

The Contra Revenue Account Contra revenue is a deduction from gross revenue, which results in net revenue. Contra revenue transactions are recorded in one or more contra revenue accounts, which usually have a debit balance (as opposed to the credit balance in the typical revenue account).

Accounting 75

Accounting Accounting General Ledger Accounts Receivable 75