Bookkeeping Blog

Doubtful Accounts And Bad Debt Expenses

Dunning Letter – communication with customers to ensure the collection of account receivable. The department must have supporting documentation for each individual account to be written-off available for review. Accounts receivable are eligible for w... Read more

Current Ratio Calculator Working Capital Ratio

I hope we all can use these lessons about working capital to make better future free cash flow growth projections and intrinsic value estimates. These are usually defined as assets that are cash or will be turned into cash in a year or less and liabi... Read more

Work In Progress Or Work In Process

WIP refers to the raw materials, labor, and overhead costs incurred for products that are at various stages of the production process. WIP is a component of the inventory asset account on the balance sheet. These costs are subsequently transferred to... Read more

Premium Vs Discount Bonds

They could trade above or below their par value while bond traders attempt to make money trading these yet-to-mature bonds. As a result, the Apple bond pays a higher interest rate than the 10-year Treasury yield. Also, with the added yield, the bond ... Read more

What Are The Effects Of Overstating Inventory?

Here again, no matter which situation is causing the reduction in the inventory to sales ratio, either one suggests that you are effectively managing your business's inventory levels and its cash flow. Inventory turnover also reflects the carrying co... Read more

What Are Permanent Accounts?

Typically, permanent accounts have no ending period unless you close or sell your business or reorganize your accounts. All income statement balances are eventually transferred to retained earnings. In accounting, a permanent account refers to a gene... Read more

Liquidity Ratio Definition & Meaning

It indicates that the company is in good financial health and is less likely to face financial hardships. Notice that the cash ratio is much smaller than the other two ratios. In analyzing the cash ratio, any ratio greater than 0.5 is considered good... Read more