Shareholders, analysts and potential investors use the statement to assess a company’s profitability and dividend payout potential. Retained earnings refer to the money your company keeps for itself after paying out dividends to shareholders. The statement of retained earnings is also called a statement of shareholders’ equity or a statement of owner’s equity. For information […]
Category Archives: Bookkeeping
And don’t forget that if you’d rather not handle bank reconciliation by hand, accounting software—including free accounting software options—should minimize some of the hassle. This is a simple data entry error that occurs when two digits are accidentally reversed (transposed) when posting a transaction. For example, you wrote a check for $32, but you recorded […]
The purpose of billing is to accurately and efficiently charge customers for revenue definition and meaning products or services provided by a business. It helps to keep track of revenue and accounts receivable and is essential for financial management. Basic billing refers to a simple invoicing process where a business creates and sends invoices to […]
As is apparent from both calculations, using different basis will give different results. The price using units of production as a basis is $47,500 while the price using labor hours as a basis is $46,250. For some companies, the difference will be very minute or there will be no difference at all between different basis […]
In contrast, if the percentage change in quantity demanded is less than the percentage increase in income, the value is less than unity, and we call the good or service a necessity. Luxury handbags from renowned brands like Louis Vuitton and Gucci may face competition from other high-end designers or even emerging luxury brands. Consumers […]
You might be asking yourself, “is the Income Summary accounteven necessary? ” Could we just close out revenues and expensesdirectly into retained earnings and not have this extra temporaryaccount? We could do this, but by having the Income Summaryaccount, you get a balance for net income a second time. This givesyou the balance to compare […]
This is useful for comparing the totals in your books to the totals on your bank statement. To complete the reconciliation, make sure the difference shown is zero. Some QBO users assume that reconciling a bank account is when they add or match transactions in the bank feeds window. You cannot reconcile a bank account […]
In this episode, Harlem chocolate Factory founder Jessica Spaulding recalls a few of her early money management mishaps, and three big lessons learned. See how you can track and manage your whole financial picture in one place—from bank transactions, expenses, and beyond. Everything is organized in its place the way it should be. I appreciate […]
If a company has a cash short situation, which is more common, the amount it is short will reduce the company’s net income and its cash balance in the general ledger. A cash over situation will increase a company’s net income and increase its cash balance in the general ledger. Petty Cash Account Type Petty […]
Logistically, that grocery store is more likely to try to sell slightly older bananas as opposed to the most recently delivered. Should the company sell the most recent perishable good it receives, lifo cogs formula the oldest inventory items will likely go bad. For example, the seafood company, mentioned earlier, would use their oldest inventory […]