ADP RUN articles

New credit and debit accounts may also be added to track the new asset’s depreciation. The depreciation expense will be debited, while the accumulated depreciation is credited. Sal goes into his accounting software and records a journal entry to debit his Cash account (an asset account) of $1,000.
She secures a bank loan to pay for the space, equipment, and staff wages. These 5 account types are like the drawers in a filing cabinet. Within each, you can have multiple accounts (like Petty […]

If the company allocates its fixed manufacturing overhead costs to products based on volume (such as production machine hours), Products X & Y will appear to have high overhead costs. With the Products X & Y no longer being manufactured, the company’s manufacturing production machine hours will decrease significantly. This term is used when a company tries to cut down overhead costs by reducing the number of products or services being offered. If overhead costs are not […]

Calculating the current ratio at just one point in time could indicate that the company can’t cover all of its current debts, but it doesn’t necessarily mean that it won’t be able to when the payments are due. It’s ideal to use several metrics, such as the quick and current ratios, profit margins, and historical trends, to get a clear picture of a company’s status. The current ratio can be useful for judging companies with massive inventory back stock because that […]

All these questions can be answered when you have a good accounting system that is updated regularly. Download our brief brochure for a quick overview of all of the services we offer. FreshBooks lets you work with many custom forms and parameters for work.

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We understand the sensitive nature of changi […]

With liquidation, cumulative preferred shares still rank below the company’s creditors. In the future, the company must catch up on all cumulative dividend payments before paying any dividends to common shareholders. The calculation of accumulated unpaid dividends depends on the term sheet. Sometimes the term sheet will state that the cumulative dividends are only paid if the company liquidates (financial hardship or by sale). If the company can’t pay out a cumulative dividend in a […]

However, one must ensure the other party’s creditworthiness before extending any credit. As previously mentioned, credit sales are sales where the customer is given an extended period to pay. There are several advantages and disadvantages for a company offering credit sales to customers. The credit period is the specific period given to the dealers to pay an invoice.
If Michael pays the amount owed ($10,000) within 10 days, he would be able to enjoy a 5% discount. Therefore, the amount t […]