Accounting

Using the indirect method can be confusing because you are converting the accrual net income to a cash basis net income. Thus, any increase in assets must be subtracted out, while a decrease in assets must be added back in. I know this sounds confusing, but you have to think about it in terms of cash.
Therefore, extending credit to a customer is an investing activity, but it only appears on the cash flow statement when the customer pays off their debt. The balance sheet is one of the three fund […]

The book in which these classified accounts are kept is known as ledger. A ledger account can be checked any time to see the additions and reductions of particular item to which the account relates. The cash account, for example, would reveal the inflows and out flows of cash during a particular period of time.
Whatever the origins, Luca Pacioli and Leonardo da Vinci published the first textbook on double-entry accounting in 1494. This text allowed others to study this accounting system and put […]

AITA was popularized by and is widely used in reference to r/AmITheAsshole, a Reddit forum dedicated to this activity. The goodwill to assets ratio measures the proportion of a company’s goodwill, which is an intangible asset, to its total assets. The usefulness of deriving net tangible assets, however, varies across industries. Medical device manufacturers, for example, have high levels of valuable intangible assets.
Free Financial Modeling Guide A Complete Guide to Financial Modeling Th […]

The evaluation of obtained evidence determines if the information systems are safeguarding assets, maintaining data integrity, and operating effectively to achieve the organization’s goals or objectives. These reviews may be performed in conjunction with a financial statement audit, internal audit, or other form of attestation engagement. The main purpose of an external audit is to validate a company’s financial statements and to provide assurance of the accuracy of financial report […]

Each company has its dollar value threshold for what it considers an expense rather than a capitalizable cost. With capitalized costs, the monetary value isn’t leaving the company with the purchase of an item, as it is retained in the form of a fixed or intangible asset. Long-term assets are reported on the balance sheet and are usually recorded at the price at which they were purchased, and so do not always reflect the current value of the asset. Long-term assets can be contrasted with c […]

She most recently worked at Duke University and is the owner of Peggy James, CPA, PLLC, serving small businesses, nonprofits, solopreneurs, freelancers, and individuals. Operating expenses are incurred during regular business, such as general and administrative expenses, research and development, and the cost of goods sold. David Kindness is a Certified Public Accountant and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and […]