Category: Bookkeeping

Provide your payees with incentives, such as discounts or priority services, to encourage them to deposit or cash checks promptly. This deduction is necessary to reconcile the bank’s balance with the company’s records because it accounts for money that has effectively left the company’s control. By subtracting outstanding checks from the bank balance, the adjusted…

Get an overview of the statement of cash flows, which show cash sources and uses during a specific period of time. Factors that are used to convert future cash flows to their present value. The answer tells us that receiving $5,000 three years from today is the equivalent of receiving $3,942.45 today, if the time…

Tax accounting method changes: Procedures and potential issues during an IRS exam To calculate the adjustment, one must determine the account balances at the beginning of the year of change as if the new method were already in place. For instance, a business changing from the cash method to the accrual method would calculate its…

IRS updates list of automatic changes In the case of an accounting change, users of the financial statements should examine the footnotes closely to understand what any changes mean and if they affect the true value of the company. Lastly, a bank may also use an accounting method change regarding its treatment of loan origination…

Implementing Accounting Changes: Types, Impacts, Best Practices This guide provides a quick reference for the process of changing accounting methods, encompassing IRS consent, Form 3115 submission, and key considerations. Accounting changes and error correction refers to guidance on reflecting accounting changes and errors in financial statements. It may involve correction of incorrect class lives or…

Without understanding terms like COGS, inventory turnover, and shrinkage, you can easily make costly mistakes. Implementing FIFO is straightforward and doesn’t require complex software or systems. The last of this series of ledgergurus steps is to establish reorder points to automate the replenishment process when stock levels reach a certain threshold. Ecommerce Accounting Resources We’re…

Common examples include unrecorded revenues, unpaid expenses, prepaid items, and assets that need depreciation. Accrued revenues represent income that has been earned but not yet recorded in the accounting system. It is crucial to accurately record revenue in the correct accounting period to ensure that income earned but not yet received is properly accounted for.…

Return on Equity: ROE vs ROI: Which Metric is Better for Investors ROI is a versatile metric applicable to a wide array of investments, from financial assets like stocks or bonds to business ventures such as new product development or marketing campaigns. ROI stands for return on investment and is used to evaluate the efficiency…

ROI vs ROE: A guide for small businesses This process is crucial to ensure that the program not only meets these expectations but also achieves measurable success outcomes, supported by a solid chain of evidence and levels of evaluation. However, ROE goes beyond financial metrics and also considers the non-financial benefits of learning and development…

Return on Equity: Understanding the Difference Between ROI Metric and ROE Investors can assess the relative performance and efficiency of different companies by comparing their ROEs. This analysis allows investors to identify companies that are generating higher returns on equity compared to their industry peers. It provides insights into which companies are better at utilizing…