Preparing an adjusted trial balance requires attention to detail to avoid errors in your financial statements. If you’re unfamiliar with adjusting entries or balancing accounts, work with a small business accounting professional to ensure your records are accurate from the start. An unadjusted trial balance is a preliminary listing of all general ledger accounts and […]

A lower number of inventory turnover days indicates more efficient inventory management, as the company is selling its inventory faster and keeping less stock on hand. Conversely, a higher number suggests that inventory is taking longer to sell, potentially leading to issues such as obsolescence, storage costs, and reduced cash flow. It’s a handy financial […]

An accounting period is the time period that financial statements refer to. You have to make sure that all transactions are recorded in a timely manner so that they can be reported. A cash flow statement shows how cash is entering and leaving your business. While the income statement shows revenue and expenses that don’t […]

This helps to lower their taxable income, thereby decreasing their tax liability. Understanding the distinction and classification of expenses and losses is essential for accurate financial reporting and decision-making. These concepts help businesses evaluate operational efficiency, ensure compliance with accounting standards, and provide a clear picture of financial performance to stakeholders, investors, and regulatory bodies. […]

More than half of taxpayers turn to a tax professional for help filing a tax return. While most tax preparers deliver exceptional and professional service, selecting the wrong preparer can lead to financial harm. The IRS expects more than 140 million individual tax returns for tax year 2024 to be filed ahead of the Tuesday, […]

When done frequently, reconciliation statements help companies identify cash flow errors, present accurate information to investors, and plan and pay taxes correctly. They can also be used to identify fraud before serious damage occurs and can prevent errors from compounding. Non-sufficient funds (NSF) checks are recorded as an adjusted book-balance line item on the bank […]

You’ve heard the saying, “If you can’t measure it, you can’t manage it.” Bookkeeping is a foundational activity that is relied on by many essential business functions such as accounting and tax planning. Accurate bookkeeping provides good financial records for every business and allows business owners to make informed management decisions. This position is also […]

Clearly, no insurance company would sell insurance that covers an unfortunate event after the fact, so insurance expenses must be prepaid by businesses. Unexpired or prepaid expenses are the expenses for which payments have been made, but full benefits or services have yet to be received during that period. Prepaid assets are nonmonetary assets whose […]

Incremental cost, also known as marginal cost, is a key concept in managerial accounting and financial analysis. It refers to the additional cost incurred when producing extra units of a product or service. Understanding how to accurately calculate incremental costs is important for making sound business decisions. Several factors can influence incremental costs, and it […]

Frequency of a year is the amount of time for the note and can be either days or months. Since notes receivable have a longer duration than accounts receivable, they usually require the maker to pay interest in addition to the principle, at the maturity of the note. manufacturing financial statements Interest receivable is recognized […]