The Accounting Equation is a vital formula to understand and consider when it comes to the financial health of your business. The accounting equation is a factor in almost every aspect of your inventory in transit business accounting. If a transaction is completely omitted from the accounting books, it will not unbalance the accounting equation…. Read More

Unlike most of the national currencies that they replaced, euro banknotes do not display famous national figures. The seven colourful bills, designed by the Austrian artist Robert Kalina and ranging in denomination from €5 to €500, symbolize the unity of Europe and feature a map of Europe, the EU’s flag, and arches, bridges, gateways, and… Read More

The accounting equation states that the amount of assets must be equal to liabilities plus shareholder or owner equity. There are different categories of business assets including long-term assets, capital assets, investments and tangible assets. They were acquired by borrowing money from lenders, receiving cash from owners and shareholders or offering goods or services. The… Read More

Mixed costs, also known as semi-variable costs, are business expenses that have both fixed and variable components. In simpler terms, it’s a cost that fluctuates according to the amount of production and cannot be eradicated like a fixed expense. Some of the expenses are fixed because they do not change in total as the number… Read More

If you’re a very small business, it’s probably best to work with an accounting firm that’s also small and can provide more personalized attention. You’ll also want to establish expectations regarding communication—how often you’ll connect and in what way. You can also check with your state or national associations, such as the state CPA societies,… Read More

It’s not based on the timing of when money goes in or out, instead focusing on the tracking and content of financial agreements. The accrual method often gives a better understanding of the business’s financial health. Many small business owners worry about the affordability of hiring an accountant. Hiring a dedicated professional can be expensive,… Read More

The expected selling price is calculated as the number of units produced multiplied by the unit selling price. This is often reduced by product returns or other items that may reduce gross revenue. It can also simply be done for just a single item rather than a group of units. In regards to accounts receivable,… Read More

Our solution has the ability to prepare and post journal entries, which will be automatically posted into the ERP, automating 70% of your account reconciliation process. However, the company anticipates that it will incur a collection cost of $200 and may not be able to collect $300 of the invoice amount due to potential bad… Read More

The primary purpose of escrow is to ensure fairness and security in transactions. In situations where mutual trust might be lacking or where the stakes are high, escrow acts as a neutral intermediary, ensuring both parties play by the rules. They ask a third, disinterested, neutral person—the stakeholder—to hold the money (“stakes”) they have wagered… Read More

If the turnover ratio declines from one period to the next, this indicates that the company is paying its suppliers more slowly, and may be an indicator of worsening financial condition. A change in the turnover ratio can also indicate altered payment terms with suppliers, though this rarely has more than a slight impact on… Read More