Kategori: Bookkeeping

If the balance sheet deficit does represent a serious financial problem, there are steps the company can take, such as borrowing money or selling shares. At worst, they lose what they’ve invested, but they’re never liable for the company’s debts beyond that. To calculate retained earnings, the beginning retained earnings balance is added to the… Lanjutkan membaca Negative Shareholders’ Equity: What Does It Mean?

Petty cash funds are classified as cash because these funds are used to meet current operating expenses and to pay current liabilities as they come due. Even though petty cash has been set aside for a particular purpose, its balance is not material, so it is included in the cash balance in the financial statements.… Lanjutkan membaca Cash and Cash Equivalents CCE: Formula and Examples

In aggregate, this works out to an unfavorable variance of $2,400. Flexible budgets are one way companies deal with different levels of activity. A flexible budget provides budgeted data for different levels of activity. Another way of thinking of a flexible budget is a number of static budgets. Next, interpret the variance of each line… Lanjutkan membaca How to Implement a Flexible Budget

Therefore, if a company collects payments for products or services not actually delivered, the payment received cannot yet be counted as revenue. Deferred Revenue is recognized once a company receives cash payment in advance for goods or services not yet delivered to the customer. With the right strategy tailored to your business model, unearned revenue… Lanjutkan membaca Deferred Revenue Vs Unearned Revenue Are They Different?

On the other hand, expenses and withdrawals decrease capital, hence they normally have debit balances. In accounting, understanding the normal balance of accounts is crucial to accurately record financial transactions and maintain a balanced ledger. The normal balance can either be a debit or a credit, depending on the type of account in question. Revenue… Lanjutkan membaca Normal Balance of Accounts