Cash equivalents are also generally included with cash on a business’s financial statements. They are securities that can easily and quickly be converted into cash. For an investment to be considered a “cash equivalent,” it must mat... Read more
Each of these columns or sections is further broken down into categories. Insurance Expense is part of operating expenses in the income statement. Expired insurance premiums are reported as Insurance Expense. Accounting has many classifications for d... Read more
Overview of what is financial modeling, how & why to build a model. This lesson will concentrate on the acquisition of property, plant, and equipment. Accounts receivable is the balance of money due to a firm for goods or services delivered or used b... Read more
On the other hand, when a utility customer pays a bill or the utility corrects an overcharge, the customer's account is credited. This is because the customer's account is one of the utility's accounts receivable, which are Assets to the utility beca... Read more
The terms and conditions set forth in an irrevocable letter of credit are fixed, and can only be changed with the express agreement of all parties involved. An irrevocable letter of credit is when an bank representing an importer agrees to pay the se... Read more
One difference between an invoice and statement is that invoices go out with each shipment or service provided. That's not how it works with a billing statement, meaning a list of all outstanding invoices and the total yet unpaid. You send statements... Read more
A timesheet invoice may also be generated by Operated equipment rental companies where the invoice will be a combination of timesheet based charges and equipment rental charges. Invoices are the backbone of the accounting system for small businesses.... Read more
The interest earned on loans and advances are just like interest earned on normal investments and is reported in the statement of cash flows according to US-GAAP or IFRS as discussed above. Figure 12.1 "Examples of Cash Flows from Operating, Investin... Read more
Your inventory’s book value should be $38,000 ($50,000 – $12,000). However, due to shrinkage, your actual inventory value is $35,000. Use the inventory shrinkage rate to find out how much value you lost. Theft, both internal and external to the... Read more
A simpler version of accounting is single entry accounting, which is essentially a cash basis system that is run from a check book. Under this approach, assets and liabilities are not formally tracked, which means that no balance sheet can be constru... Read more
