Starting a business should be an exciting time. As long as you are properly prepared, you can increase your chances of success significantly and reduce the many stresses of entrepreneurship. Once you have that revolutionary idea, it is critical to look ahead to your short-term and long-term financial future. Before you do anything else, make …
The accounting cycle is a process that bookkeepers, accountants, and businesses use to prepare financial statements. It’s a systematic and disciplined approach that ensures the consistency and accuracy of financial reporting. Below are components of the accounting cycle and the relevance to business stakeholders. Accounting Cycle Defined The process of identifying relevant transactions and economic events, …
A percentage of accounts receivable will become uncollectible for a myriad of reasons, requiring a periodic write-off of receivables. Whether the allowance for doubtful accounts or the direct write off method are used, an uncollectible accounts expense must be recorded to remain compliant with U.S. GAAP. Below are details regarding this expense, and how it …
When a company borrows money, they must pay interest and record the expense accurately to reflect the costs of borrowing. Calculating interest expense can be straightforward, if the note payable has a stated interest rate or coupon. However, the process can become difficult to account for, given the nature of the debt instrument and related …
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