Categoría: Bookkeeping

As a corresponding entry, you will credit the income summary account, which we mentioned earlier. In this example we will close Paul’s Guitar Shop, Inc.’s temporary accounts using the income summary account method from his financial statements in the previous example. On the statement of retained earnings, we reported the ending balance of retained earnings to be...

If you receive money or property that is not like-kind property in addition to the like-kind property, and the preceding six conditions are met, you have a partly nontaxable trade. You are taxed on any gain you realize, but only up to the amount of the money and the fair market value of the property...

If the total cost of taxes and goods sold is more than the value of products and services sold, it is known as a net loss. Equity refers to the difference between liabilities and assets on the balance sheet. To calculate the burn rate, you’ll select a period and then subtract your on-hand cash at...

On this form, you will report your income and your deductions. This form helps you know the amount of tax you owe, and the refund you can expect to receive. If you rent space in a business, work from home, or travel to your clients, you may be considered self-employed. You’ll estimate, file, and submit...

For example, if a company reports a return on equity of 12% for several years, it is a good indication that it can continue to reinvest and grow 12% into the future. Shareholder equity is one of the important numbers embedded in the financial reports of public companies that can help investors come to a...

The accounting cycle is a multi-step process designed to convert all of your company’s raw financial information into financial statements. Mark Summers from Supreme Cleaners needs to organize all of his accounts and their balances, including the $200 sale, onto a trial balance. He also needs to ensure his debits and credits are balanced at...

Whether you’re dreaming of a multi-level empire or a cozy little corner in the market, it all starts with a plan. Keep in mind, a rolling forecast is easiest if you’re using a tool that takes care of the legwork for you rather than having to manually copy/paste data and formulas every month. A rolling...

Debt ratio is an important financial metric that businesses utilize to assess their financial stability. It shows the proportion of a company’s total liabilities compared to its total assets, thereby indicating the company’s ability to manage and repay outstanding debt obligations. A lower debt ratio signifies less reliance on borrowed funds and better overall financial...