Category Archives: Bookkeeping

Work in Progress or Work in Process Which is Correct?

In addition, the market may be more willing to buy work in process goods outright if they are for standardized goods. On the other hand, work in progress assets are usually treated as long-term assets. These undertakings may take years to complete, and the financial benefits of work in progress projects may not be fully […]

Statement of Comprehensive Income Overview, Components and Uses

The comprehensive income classification presents a more complete view of a firm’s income than can be found in a traditional income statement. In financial accounting, corporate income can be broken down in a multitude of ways, and firms have some latitude on how and when to recognize and report their earnings. To calculate this, a […]

Can a corporation deduct dividend payments before its taxes are calculated?

The dividends, therefore, influence the financing activities of the cash flow statement, which reduces the business’s cash balance. Although they cannot be classified as an expense, they reduce the ending balance of the cash. Cash dividends on a corporation’s preferred stock (if any) are not reported as expenses. The dividend frequency is the number of […]

Normal Balance Debit and Credit

Identifying the type of account, such as an asset or liability, and putting it in the right column, helps determine if an account would typically have a credit or debit balance. While each account has a normal balance, it’s possible for accounts to have either a credit or debit balance, depending on the bookkeeping entries […]

Balance Sheet: Explanation, Components, and Examples

Fourth, off-balance sheet accounts can create conflicts of interest for a company’s management. The fixed asset part of the balance sheet sometimes includes a negative value—that is, a number you subtract from the other fixed asset values. This number is depreciation, and it’s an accountant’s way of slowly deducting the cost of a long-lived asset […]

Understanding Accounts Receivable: Definition, Calculation

This may be a cue to adjust your collection strategies to speed up collections. DSO is an AR metric that reveals the average time customers take to pay you once you’ve made a sale. It helps you determine the effectiveness of your cash collection strategy. A low ratio may mean revising your company’s bookkeeping and […]