FAQ

What is a Single Step Income Statement?

When gauging the performance of an organization, the income statement helps illustrate profitability, major expenses and business trends. The level of detail needed on an income statement varies depending on the circumstances and report users. The single step statement is the simplest format and has advantages relative to the multi step statement, especially for a …

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What is Prepaid Rent?

When rent is paid in advance under accrual accounting, it is considered prepaid rent and is recorded on a company’s balance sheet. Whether the prepaid is recorded as an asset or liability is dependent on the nature of the transaction. Below are important features of prepaid rent and how it’s accounted for.  Prepaid Rent & Accounting …

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What is the Difference Between Gross Sales and Net Sales?

Revenue is among the most important financial metrics on the income statement and in comparative financial statements, but it’s not always straightforward to analyze. There is a difference between gross sales and net sales, and these differences give leaders insight into the efficiency and effectiveness of the sales and marketing process. Credit policies and other …

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The Purpose and Benefits of Closing Entries in Accounting

Although there are many different benefits of proper accounting, companies frequently rely on it for evaluative purposes. Meaning, they take advantage of their data to quantify their financial position. For instance, think about the way that the income statement depicts some entity’s operational efficiency. In order to facilitate these outcomes, however, accounting experts must rely on …

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