Categoría: Bookkeeping

By adding interest, taxes, depreciation, and amortization back to net income, EBITDA can be used to track and compare the underlying profitability of companies regardless of their depreciation assumptions or financing choices. EBITDA, short for earnings before accounting for wholesale distribution businesses interest, taxes, depreciation, and amortization, is an alternate...

1) Mistakes are easier to find since each entry has a matching record 1) Every transaction is recorded twice, reducing mistakes Equity also grows when the owner invests more money into the business. They increase when a business borrows money and decrease when debts are paid. Credits record the value...

By using these statements, the company's financial performance can be examined on a calendar-year basis, regardless of the fiscal year cycle. Regardless of the chosen fiscal year, what matters for analysis is the period's business activity level, not the dates itself. In short, while the fiscal year is a seemingly...

A company keeps its T-accounts together in a ledger (or general ledger). For convenience, assume that the business incurs each of these transactions during the final two days of Year Four, just prior to preparing financial statements. Earlier in this chapter, a number of common transactions were presented (Figure 4.1...

Before their availability on the secondary market, shares are authorized, issued, and, finally, purchased by investors who became equity owners or shareholders of the issuing company. Shareholders of common stock typically possess the right to participate in annual shareholders meetings and contribute toward the election of the company’s board of...

Are the value of your assets and liabilities now zero because of the start of a new year? Your car, electronics, and furniture did not suddenly lose all their value, and unfortunately, you still have outstanding debt. Therefore, these accounts still have a balance in the new year, because they...

Startups should weigh the features offered by paid vs. free software against their current and anticipated needs. While free software like Wave offers essential features without cost, paid software may provide more comprehensive tools and scalability necessary for growth. Below is a curated comparison table that provides a concise overview...

You can choose to use an online estimator or a worksheet attached to the W-4 to calculate the appropriate amount to withhold. This approach prevents potential tax liabilities at the end of the year and enables you to align your withholding with your financial goals. Properly accounting for all jobs...

In conclusion, the cost of hiring a CPA can vary based on several factors, including the complexity of the tasks, the CPA’s experience, and your location. However, investing in a CPA can provide significant benefits, including expert financial management, time savings, and compliance with regulations. Understanding accounting fees is essential...

Bearer bonds are no longer issued by the U.S. This ensures that bond owners receive all interest payments due and that stockholders receive their cash or stock dividends. They are anonymous and can easily be used illegally for money laundering and tax evasion. Bearer bonds aren’t issued in the U.S.,...