But to understand the accounting process, let’s learn how to record the cash payment for telephone charges. When you receive the $20 from the employee, you will credit the account Receivable from Employees. Another common expense for business owners is the cost of paying employees. In this case, the total value of your payroll gets […]
Contribution margin is the remaining earnings that have not been taken up by variable costs and that can be used to cover fixed costs. Profit is any money left over after all variable and fixed costs have been settled. Now, add up all the variable costs directly involved in producing the cupcakes (flour, butter, eggs, […]
Consequently, the cost of goods sold (COGS) reported is higher, and the company’s taxable income is lower than what it would have been with FIFO (First-in, First-out). Dollar-value LIFO is an accounting method utilized for inventory that follows the last-in-first-out model. Dollar-value LIFO involves this approach with all figures in dollar amounts, as opposed to […]
This, in turn, gives businesses a clear picture of where they stand. This trial balance type allows businesses have a summarized view of all the account balances post-adjustment to respective expenditures. The second method is simple and fast but is considered less systematic. This method is usually used by small companies where only a few […]
Cash value life insurance is a type of permanent life insurance policy that includes a savings component. Policyholders can access the cash surrender value of life insurance policies. If you are shopping for life insurance or currently have an existing policy, read this guide to better understand cash surrender value, how to calculate it, and […]
This level of oversight not only builds trust between the business and the outsourced provider but also helps in identifying potential issues before they escalate. Outsourcing bookkeeping requires sharing sensitive data with third-party providers, which introduces potential vulnerabilities. It is crucial for businesses to implement robust security measures such as encryption, secure access controls, and […]
Generally, both of these figures can be found on a company’s balance sheet. The number of shares outstanding consists of shares held by institutions, restricted shares held by company insiders, and shares available for investors to buy and sell on the open market. Outstanding shares play a crucial role in determining a company’s market capitalization, […]
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