Printing cost of pamphlets that have already been distributed 2 years ago is a sunk cost that cannot be treated as an asset because it is unlikely to bring in new clients in the future. You cannot recognize a future asset now based on the expectation of a transaction or event that hasn’t already happened. […]
Category Archives: Bookkeeping
These resources take many forms from cash to buildings and are recorded on the balance sheet until they are used. Once these resources are used or spent, they are transferred from the balance sheet to the income statement and called expenditures. The chart below lists examples of non-current assets on the balance sheet. Liquid assets can be quickly and […]
A building with a useful life of 25 years and no salvage value will result in a monthly depreciation expense of 1/300 of the building’s cost. The revenue accounts are expected to have credit balances (since revenues cause the stockholders’ or owner’s equity to increase). Contra revenue accounts such as Sales Returns and Allowances and […]
Updating your stock levels instantly lets you know what, where and how much inventory stock you have at any given time. Improving inventory turnover through proper stock control will help reduce the COGS, positively impacting cashflow and resulting in more cash in the bank. The cashflow your business generates is largely dependent on how you […]
There is no cash tied up in inventory as a non-cash item nor do you have less inventory that is unable to meet demand (causing missed sales). In conclusion, the Cash Flow Statement is a vital financial statement that provides valuable insights into a company’s cash flow activities. It allows stakeholders to evaluate the company’s […]
It is a critical function for businesses of all sizes, from small enterprises to large corporations. This section will outline the strategies for optimizing inventory management to enhance small businesses’ cash flow and operational efficiency. For a sales manager, inventory levels are tied to customer satisfaction and sales performance. © Accounting Professor 2023. All rights […]
As you learned in Role of Accounting in Society, US-based companies will apply US GAAP as created by the FASB, and most international companies will apply IFRS as created by the International Accounting Standards Board (IASB). As illustrated in this chapter, the starting point for either FASB or IASB in creating accounting standards, or principles, […]
This complexity necessitates monitoring exchange rates and possibly using hedging techniques to mitigate exchange rate risk. Revenue and Expense Misalignment in Seasonal Businesses Its AI-powered tools automatically match expenses to revenue, flag discrepancies in receipts, and categorise transactions accurately. This ensures your business adheres to the Expense Recognition Principle without the risk of human error […]
Fyle integrates with major platforms like QuickBooks Online, Xero, Sage Intacct, and NetSuite, ensuring that fully coded expense data syncs automatically. With a quick photo submission, Fyle Car Dealership Accounting automatically extracts data and matches it to the right transaction, saving hours of manual work. Documentation also helps during audits, as auditors can trace each […]
For some assets, the price principle doesn’t reflect what the asset is currently worth. If an asset belongs to a frequently fluctuating market, you might need to look at its fair market value. The argument for using historical costs is that accounting is concerned with past transactions and that the information and reports that accounting […]