Category: Bookkeeping

  • What Is a Trial Balance vs Balance Sheet? An In-Depth Look

    It is an excellent way of internally keeping an eye on the accurate recording of all accounting transactions. It is the most straightforward method of detecting any wrong or improper entries made in the books what is form 8941 its a tax credit for small business health insurance costs of accounts. Overall, the trial balance…

  • Value Date: What It Means in Banking and Trading

    Pending transactions also won’t affect your outstanding credit card balance. The credit card post date can, however, affect the amount of interest you pay, particularly when your card issuer uses your daily balance to calculate your finance charge. You may not owe interest on new purchases if you pay in full before the grace period…

  • Why would a company use LIFO instead of FIFO?

    See also section 1411 (imposing a 3.8 percent tax on certain taxpayers’ net investment income). An independent contractor conducts an annual study for the Internal Revenue Service of the fixed and variable costs of operating an automobile to determine the standard mileage rates for business, medical, and moving use reflected in this notice. For purposes…

  • Operating Cash Flow Ratio Formula, Example, Define

    A cash flow statement is one of the three major financial statements that showcases the health of a business. Changes in working capital, including alterations in accounts receivable, accounts payable, and accrued expenses, are crucial elements affecting OCF. An increase in accounts receivable implies less cash, while an increase in accounts payable means more cash…

  • Understanding Business Expenses and Which Are Tax Deductible

    If a corporation has overpaid its income taxes and is entitled to a refund, the amount will be reported on the balance sheet as a current asset such as Other receivables. Business owners use the payroll expense account and the payroll tax expense account to record payroll-related expenses. The payroll expense account shows the sum…

  • Accrual Accounting vs Cash Basis Accounting: What’s the Difference?

    It’s a snapshot of your business transactions and only focuses on payments that have actually happened. Accrual accounting takes a more in-depth look and focuses on obligations. One of the simplest forms of accounting is called cash-basis accounting. The larger and more complex your business becomes, the more willing you should be to shift to…

  • What is Trade Discount in Accounting?

    We record the revenue only the net amount which equals to gross price less discounted amount. A trade discount is calculated on the list price itself before any transaction takes place. In other words, it will be calculated on the list price and then deducted from the same. Eventually, the remaining amount becomes the sale…

  • How and When COGS account hit for transactions

    It defers this cost at the point of payment (in April) in the prepaid rent asset account. In May, ABC has now consumed the prepaid asset, so it credits the prepaid rent asset account and debits the rent expense account. Many purchases a company makes in advance will be categorized under the label of prepaid expense.…

  • Dalal Associates CPAs PC: A professional tax and accounting firm in Westbury, New York: About Us

    If you don’t have any employees yet, you don’t have to worry about payroll. However, if you have even one employee, you’ll need to properly track payroll. This includes everything from managing employee personnel records to retaining employee time records. This also means you need to manage all related payroll forms including 941s as well…

  • Accrue: Definition, How It Works, and 2 Main Types of Accruals

    To determine how much of that payment is interest, take $400,000 and multiply it by 0.05. The result is $20,000, which divided by 12 gives you $1,667 in interest for that month. By subtracting that from the total payment of $2,147, you find that you paid $481 towards your principal. Say you take out a…