Accounting should be conducted based on the assumption that a company will continue to operate indefinitely. If an accountant is required to make any assumptions, those assumptions should be based on historical precedents set by the business. Account... Read more
For instance, if your business borrows $50,000 from the bank to purchase additional inventory for resale, that is using financial leverage. Leverage is a financial tactic to multiply gains and losses, accomplished through borrowing capital on existin... Read more
A decrease in deferred revenue may indicate that a company does not have as much work as it did in past years. Deferred revenue is equal to the value of invoices to date over the recognizable revenue to date calculated by customer contract and then a... Read more
The responsibilities of the board of directors can vary rather significantly from company to company. Some boards do little whereas others are heavily involved in strategy and policy making. Some of these terms have been examined previously, others h... Read more
To learn more, check out CFI’s free Accounting Fundamentals Course. Whether you opt for a quarterly, annual, or monthly accounting period, make sure it’s consistent. The primary purpose of the accounting period concept is to streamline re... Read more
Examples of the kind of assets that impact this kind of amortization are goodwill, a patent or copyright. Depreciation is used to spread the cost of long-term assets out over their lifespans. Like amortization, you can write off an expense over a lon... Read more
Both suppliers and vendors supply goods and services to a company, but there are minute details that make each one a stand-alone term. Between the moment a product is made and when a customer buys it, the product travels through people and businesses... Read more
This allows organizations to identify errors, mistakes and pitfalls which can be remedied quickly and prevent larger issues in the future. The variance explanations should be as detailed as possible. Suitable explanations will provide details of WHY ... Read more
TheBlackLine Account Reconciliations product, a full account reconciliation solution, has a prepaid amortization template to automate the process of accounting for prepaid expenses. It stores a schedule of payments for amortizable items and establish... Read more
When a project has been proposed, it must first go through a preliminary analysis in order to determine whether or not it has a positive net present value using the MARR as the discount rate. The MARR is the target rate for evaluation of the project ... Read more
