Category / Bookkeeping

The balance of the $12,000 payment remains in unearned revenue until goods and/or services have been delivered for February. This is also a violation of the matching principle, since revenues are being recognized at once, while related expenses are not being recognized until later periods. Since unearned revenue is cash received, it shows as a…

If you are planning your retirement and you find yourself asking, “How can I avoid paying taxes on my IRA withdrawal when I retire? A traditional IRA is funded with your pre-tax dollars, and you pay taxes when you withdraw the funds. Since you have already paid taxes on your Roth IRA money, you don’t…

Moreover, it’s worth mentioning that interest coverage ratios might not include all financial obligations. The Times Interest Earned Ratio is an essential financial metric measuring a company’s ability to fulfill its interest payments on outstanding debt. While a low TIE Ratio can indicate potential financial distress, it should not be used as a sole predictor…

That’s why it’s crucial that every trade receivable is accurately recorded into your accounting books and sought after, in case of a payment delay. These qualities have led to renewed interest in trade finance receivables as an asset class in the past decade. According to one estimate, there were nearly trade finance-focused funds globally at…

Accounting involves the systematic process of recording financial transactions. It’s the backbone of any organization, ensuring accurate financial reporting and compliance with legal requirements. Through accounting, businesses track their income, expenses, and overall financial health. The type of fund not only dictates the accounting practices but also deeply influences fiscal management strategies and broader public…

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They give organizations a clear and accurate picture of their financial position, which enables them to make informed business decisions. Some reconciliations are necessary to ensure that cash inflows and outflows concur between the income statement, balance sheet, and cash flow statement. Cash flow can be calculated through either a direct method or an indirect…

These purchases are made during the period for which you need to measure the accounts payable turnover ratio. Therefore, a combination of accounts payable and accounts receivable is important for your business’s performance. In this article, we will talk about the what accounts payable means, the accounts payable journal entry, the accounts payable process, and…

This is because years of retained earnings could be used for expenses or any asset to help the business grow. However, debt is the riskiest form of financing for businesses because the corporation must make regular interest payments to bondholders regardless of economic conditions. Total liabilities are the sum of all balance-sheet liabilities, both current…

Overall, inventory tracking is crucial for e-commerce businesses to maintain efficient operations, optimize inventory levels, and provide excellent customer service. It empowers businesses to make informed decisions, reduce operational costs, and remain competitive in the rapidly evolving e-commerce landscape. Damaged goods are another category that your inventory tracking method should account for. Any products inventory…