Accounting Tools

DECEMBER 23, 2023

An expense is the cost incurred in order to generate revenue or obtain something. An alternative definition is that an expense is the reduction in value of an asset as it is used to generate revenue. Under the matching principle , expenses are typically recognized in the same period in which related revenues are recognized.

Accruals 75

Accruals Bookkeeping Accounts Payable Accounts Payable 75

Counto

MARCH 20, 2024

The choice between cash and accrual accounting can significantly impact how businesses manage their finances. Let’s delve into the differences, benefits, and downsides of each method. Cash Basis Accounting Cash basis accounting revolves around timing – recording revenue and expenses based on when money exchanges hands.

Accruals 52

Accruals Accounting Accounting Accounts Payable 52

Accounting Tools

SEPTEMBER 29, 2023

Related Courses Revenue Recognition Unearned revenue is a customer payment for which no goods or services have yet been provided. Unrecorded revenue is a sale that has been earned, but for which no record has yet been made in a firm’s accounting system. This is a case of unearned revenue.

Invoicing 40

Invoicing Accounting Accounting 40

Accounting Tools

AUGUST 3, 2023

Income is the earnings gained from the provision of services or goods, or from the use of assets. Profit is the positive amount remaining after subtracting expenses incurred from the revenues generated over a designated period of time. What is Profit? These measures appear as subtotals on the income statement.

Bookkeeping 40

Bookkeeping Accounting Accounting 40

Accounting Tools

DECEMBER 19, 2023

What is Revenue Recognition? Revenue recognition is the process of deciding when to record revenue as the result of a sale transaction. Revenue Recognition in Accrual Basis Accounting The criteria just noted for revenue recognition are required for accrual basis accounting, where revenue is recognized once it has been earned.

Accruals 40

Accruals Bookkeeping Auditing Accounting 40

Accounting Tools

MARCH 5, 2024

When customers pay these prices, a sale occurs, which is recorded as revenue in the seller’s accounting records. The revenues generated from the prices at which goods and services are sold are noted at the top of the seller’s income statement. What is Cost? What is Price? A company sets prices for its goods and services.

Bookkeeping 40

Bookkeeping Accounting Accounting 40

Accounting Tools

JULY 8, 2023

Related Courses Revenue Management Revenue Recognition The difference between margin and markup is that margin is sales minus the cost of goods sold , while markup is the the amount by which the cost of a product is increased in order to derive the selling price. To arrive at a 20% margin, the markup percentage is 25.0%

Auditing 76

Auditing 76

Accounting Tools

AUGUST 5, 2023

Related Courses Bookkeeping Guidebook The Income Statement The Interpretation of Financial Statements What is Revenue? Revenue is the gross amount earned from sales activity. More specifically, revenues are the fees generated from the sale of goods and services, prior to the deduction of any expenses. What are Earnings?

Financial Statements 40

Financial Statements Bookkeeping 40

Accounting Tools

FEBRUARY 16, 2024

Profitability ratios are a set of measurements used to determine the ability of a business to create earnings. Profitability ratios are derived from a comparison of revenues to difference groupings of expenses within the income statement. This is used for breakeven analysis.

Accruals 75

Accruals Financial Statements Accounts Receivable Accounts Receivable 75

Accounting Tools

JUNE 19, 2023

The post-closing trial balance contains no revenue , expense , gain , loss , or summary account balances, since these temporary accounts have already been closed and their balances moved into the retained earnings account as part of the closing process. This is one of the last steps in the period-end closing process.

General Ledger 75

General Ledger Computation Accounts Payable Accounts Payable 75

Accounting Tools

NOVEMBER 6, 2023

Related Courses The Income Statement What are Earnings Before Taxes? Earnings before taxes is a measure of the earnings generated by a business before making any tax payments to the government. Since tax rates vary by jurisdiction, the earnings before taxes number normalizes reported earnings for easier comparison.

Tax 40

Tax 40

Accounting Tools

NOVEMBER 1, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook Revenue Recognition What are Revenue Accounts? Revenue accounts are designed to store different types of sales transactions. An organization can generate many kinds of revenue , so it makes sense to record them within different accounts.

Accounting 40

Accounting Accounting Accruals Billing 40

Accounting Tools

SEPTEMBER 25, 2023

Current year’s net income is the profit or loss earned by a business during the current reporting period. It is calculated by subtracting all expenses from revenues for the current year. Related Articles The Difference Between Gross and Net Income The Difference Between Net Income and Net Cash Flow

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Counto

MAY 2, 2024

The Overseas Networks and Expertise Pass ( ONE Pass) Eligibility Requirements The ONE Pass is designed for top-tier professionals who meet one of the following criteria: Salary Criterion: Candidates must have earned or be projected to earn a fixed monthly salary of at least S$30,000, demonstrating high economic value.

Tax 52

Tax Accounting Accounting 52

Accounting Tools

DECEMBER 10, 2023

The accrual basis of accounting is the concept of recording revenues when earned and expenses as incurred. By doing so, all expenses related to a revenue transaction are recorded at the same time as the revenue, which results in an income statement that fully reflects the results of operations.

Accruals 75

Accruals Accounting Accounting Financial Statements 75

Accounting Tools

MARCH 5, 2024

Expenses are deducted from revenues to arrive at the profit or loss generated by a business. Comparing Expenses and Payments The difference between the two concepts is mostly a matter of timing. In this case, there is quite a lengthy delay between the payment and the expense. What are Payments?

Computation 40

Computation Bookkeeping Payroll Tax 40

Counto

FEBRUARY 17, 2024

Net Income: A Guide for Small Business Owners Understanding the difference between gross and net income is crucial for small businesses, startups, and entrepreneurs in gauging their business’s financial performance. Notably, net income consistently appears at the bottom, earning it the moniker ‘the bottom line.’

Accounts Payable 52

Accounts Payable Accounts Payable Payroll Accounts Receivable 52

Accounting Tools

SEPTEMBER 25, 2023

Economic profit is the difference between the revenue generated by a business and the opportunity costs of the assets used. The result can be substantially different from the accounting profit of an organization. Related Articles Marginal Benefit Related Courses Managerial Economics What is Economic Profit?

Accounting 40

Accounting Accounting 40

Accounting Tools

OCTOBER 20, 2023

Related Courses Managerial Economics Revenue Management Revenue Recognition What is Marginal Profit? Marginal profit is the difference between the marginal revenue and marginal cost associated with a sale transaction. Related Articles Marginal Analysis Marginal Benefit Marginal Cost

Financial Analysis 40

Financial Analysis 40

Accounting Tools

MAY 21, 2023

The following bullet points discuss the accounting methodologies under which different types of line items are included in the cash basis balance sheet. Accrual Basis Accounting Under the accrual basis of accounting , you record revenues and expenses as they are earned or incurred, irrespective of changes in cash. Fixed assets.

Accruals 76

Accruals Accounts Payable Accounts Payable Accounts Receivable 76

Accounting Tools

SEPTEMBER 30, 2023

Gross margin is the difference between revenues and the cost of goods sold , which leaves a residual margin that is used to pay for selling and administrative expenses. Net margin is the residual earnings left after all expenses have been deducted from revenues. What is Net Margin? Tax effect.

Financial Analysis 40

Financial Analysis Financial Statements Tax 40

Accounting Tools

OCTOBER 11, 2023

Or, they may be used to record revenue that has been earned but not yet billed to the customer. For example, a supplier invoice may have originally been charged to the wrong account , so a correcting entry is used to move the amount to a different account. What are Correcting Entries?

Financial Statements 40

Financial Statements Invoicing Billing Accounting 40

Accounting Tools

JUNE 6, 2023

Related Courses Revenue Management Revenue Recognition What is a Rate Fence? Related Articles How Revenue Affects the Balance Sheet Recording Reimbursed Expenses as Revenue Revenue at Gross or Net The Difference Between Gross Sales and Net Sales The Difference Between Unearned Revenue and Unrecorded Revenue When are Revenues Earned?

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Accounting Tools

JANUARY 20, 2024

This can arise with either a revenue or expense transaction. A deferral is used in order to only recognize revenues when earned and expenses when consumed. In the case of the deferral of a revenue transaction, you would credit a liability account instead of the revenue account.

Accruals 40

Accruals Bookkeeping Accounting Accounting 40

Accounting Tools

OCTOBER 26, 2023

The transaction approach is the concept of deriving the financial results of a business by recording individual revenue , expense , and other purchase transactions. These transactions are then aggregated to see if a business has earned a profit or a loss. Thus, if there are $3 million of revenues and $2.5

Bookkeeping 40

Bookkeeping Auditing Accounting Accounting 40

Accounting Tools

OCTOBER 4, 2023

Profit is the positive amount remaining after subtracting expenses incurred from the revenues generated over a designated period of time. After that, the amount of profit reported is shifted into retained earnings , which appears in a company's balance sheet. Retained earnings may also be used to buy back shares.

Accruals 40

Accruals Bookkeeping Tax Accounting 40

Counto

FEBRUARY 22, 2024

Income Statement: An income statement summarises your business’s revenues and expenses over a specific period. Income Statement: An income statement summarises your business’s revenues and expenses over a specific period. Gross and Net Profit: Gross profit is the profit earned after deducting the direct costs of goods sold.

Accruals 52

Accruals Financial Statements Accounting Accounting 52

Counto

JANUARY 3, 2024

Double Tax Agreements, also known as Double Taxation Avoidance Agreements (DTAAs), are bilateral agreements between two countries aimed at eliminating or reducing double taxation on the same income. Business Profits : Addressing the taxation of profits earned by businesses in both countries. Navigating Singapore’s DTA Network 1.

Tax 52

Tax 52

Accounting Tools

OCTOBER 11, 2023

Closing entries are recorded at the end of a firm’s fiscal year , and transfer the balances in all temporary accounts (which are the revenue and expense accounts) to the entity’s retained earnings account. Comparing Adjusting Entries and Closing Entries There are two differences between adjusting entries and closing entries.

Financial Statements 40

Financial Statements Accruals Accounting Software Invoicing 40

Accounting Tools

SEPTEMBER 7, 2023

Above the line refers to all revenue generated and expenses incurred by a business that have a direct impact on reported profits. A different interpretation of the concept is that "above the line" refers to the gross margin earned by a business. Related Articles Below the Line

Financial Statements 40

Financial Statements Tax 40

Accounting Tools

AUGUST 5, 2023

Related Courses Bookkeeper Education Bundle Bookkeeping Guidebook Reasons for Monthly Accruals Accruals allow a business to record expenses and revenues for which it expects to expend cash or receive cash, respectively, in a future period. In this case, the firm should accrue for the earned but unbilled revenue.

Accruals 40

Accruals Financial Statements Bookkeeping Billing 40

Accounting Tools

NOVEMBER 4, 2023

Budgeted Income Statement Presentation The information in the income statement may be paired with budgeted revenue and expense information, along with a variance column stating the difference between actual and budgeted results. Related Courses The Income Statement What is an Income Statement?

Financial Statements 40

Financial Statements Budgeting Financial Reporting Tax 40

Accounting Tools

JUNE 16, 2023

Related Courses Bookkeeper Education Bundle Bookkeeping Guidebook What is an Adjusted Trial Balance? An adjusted trial balance is a listing of the ending balances in all accounts after adjusting entries have been prepared. However, it is the source document if you are manually compiling financial statements.

General Ledger 74

General Ledger Financial Statements Accruals Bookkeeping 74

Billah and Associates

APRIL 21, 2023

Accounting Technicians vs Accountants – Know the Difference Indeed, these two occupations can often be difficult to discern between because of the large number of names for the many job titles and duties, especially if you are not a financial expert. We serve Mississauga, Etobicoke, Brampton, Toronto, and the rest of GTA.

Accounting 52

Accounting Accounting Financial Statements Bank Reconciliation 52

Accounting Tools

SEPTEMBER 9, 2023

Examples of Accounting Postulates Examples of accounting postulates are as follows: Revenues are recognized when earned, and expenses are recognized when assets are consumed. Related Articles Applicable Financial Reporting Framework Other Comprehensive Basis of Accounting The Differences Between GAAP and IFRS

Accounting 40

Accounting Accounting Financial Statements Financial Reporting 40

Accounting Tools

SEPTEMBER 1, 2023

A direct financing lease is a financing arrangement in which the lessor acquires assets and leases them to its customers, with the intent of generating revenue from the resulting interest payments. Unearned income is recognized in earnings over the term of the lease. If the residual value has increased, do not recognize a gain.

Accounting 40

Accounting Accounting 40

Accounting Tools

JUNE 7, 2023

The operating profit margin is the earnings that a business generates from its operating activities. This calculation does not necessarily result in a subtotal for a contribution margin (which is derived from revenues minus variable expenses), with fixed costs listed below the contribution margin.

Financial Statements 40

Financial Statements Tax Financial Analysis 40