Category: Bookkeeping

This process resets both the income and expense accounts to zero, preparing them for the next accounting period. Income and expenses are closed to a temporary clearing account, usually Income Summary. Afterwards, withdrawal or dividend accounts https://www.online-accounting.net/ are also closed to the capital account. However, some corporations use a temporary clearing account for dividends declared…

The higher the debt ratio, the more leveraged a company is, implying greater financial risk. At the same time, leverage is an important tool that companies use to grow, and many businesses find sustainable uses for debt. Some sources consider the debt ratio to be total liabilities divided by total assets. This reflects a certain…

While a working vehicle might have a market value that is more than just the sum of its parts, a junk car or truck is evaluated solely on parts. Either it has traveled its last mile, absorbed a devastating impact, suffered the violence of vandals or endured saturation from flooding. Also, an insurance adjustor may…

The sales journal is significant because it is used to transfer revenue transactions from the general ledger, track reduction of inventory, and record sales tax liability. The sales journal, which is recorded in chronological order, simplifies access to sales data, as it includes specific information related to each sale. The inability to maintain an accurate…

Additional compensation can be paid in the form of bonuses or stock options, many of which are linked to individual or group performance. Even in countries where market forces primarily set wage rates, studies show that there are still differences in remuneration for work based on sex and race. Bureau of Labor Statistics, in 2007…

The accompanying spreadsheet template may be used for a one-time analysis project or to implement ongoing program-based budgeting and financial management practices. While a calculation can be completed for a single program or activity, we highly recommend that these concepts and practices be used throughout a nonprofit. Program-based financial information will be most useful for…