Financial statements users read and analyze each statement to gain insights into a company’s operations. Each of these statements provides specific information that stakeholders will find useful. Usually, companies prepare these financial statements annually or quarterly. In some cases, companies may also present them for a longer or shorter period. The primary financial statements include …
Financial statements are documents that provide insights into a company’s operations. Usually, companies prepare four financial statements. These include the balance sheet, income statement, cash flows statement, and statement of equity. Sometimes, companies may also prepare two or three of these statements. However, the balance sheet and income statement are crucial to them. Each financial …
What are the 3 Classifications on a Balance Sheet? Read More »
Companies use various strategies to increase their sales. Usually, these strategies involve marketing and sale tactics that can help grow revenues. In some cases, these may also include providing discounts to customers. One such technique most companies benefit from is providing credit terms to customers. This way, companies can offer their products and services to …
A company’s financial statements allow its stakeholders to understand its operations better. In most cases, these will include the balance sheet, the income statement, the statement of cash flows, and the statement of retained earnings. Along with these financial statements, companies will also include notes to the financial statements. These notes include information about the …
How to Read and Analyze Balance Sheet of a Company? Read More »
Most companies have limited sources of finance. Usually, these include equity and debt. Of these, the former comes from a company’s shareholders. In exchange for these instruments, the company issues shares, which provide the holder with several rights. These rights include receiving dividends and voting rights. The latter source of finance comes from third parties, …
Accounting for Issuance of Common Stock: Example, Journal Entries, and More Read More »
Investors can invest in various securities and instruments in the market. Usually, they prefer shares and other similar instruments as they provide higher returns. These instruments come with two types of earnings, including dividends and capital gains. However, they also come with higher risks compared to other forms of investments. Some investors may not be …
Risk is a crucial factor when making decisions about investments for investors. Usually, these risks dictate the loss that these investors will make on their assets. These risks also relate to specific situations or circumstances. For some investments, they will be high, while for others, these may be lower. Ultimately, the investor must decide how …
Accounting for Issuance of Warrants: Definition, Journal Entries, and More Read More »
Office supplies are items that a business uses in routine tasks. Usually, businesses account for supplies as expenses. However, a business can also record them as assets. A business can categorize office supplies, expenses, and equipment accordingly. The accounting treatment for them will also differ. Let us discuss the accounting treatment and asset classification of …
Inheritance taxes are applicable on the bequest that a beneficiary receives. The tax rules and rates can vary from one jurisdiction to another. For example, in the US, there are no federal inheritance taxes. Most states have also repealed inheritance taxes in the US. There are only six states that have inheritance taxes. However, you …
Businesses need to charge depreciation for accounting and compliance purposes. It is a method to allocate the costs of a fixed asset over several accounting periods. Depreciation helps a business in several ways including asset valuation, tax benefits, and cost allocations. A business can use any depreciation method. However, tax regulatory authorities require following a …
