Category: Bookkeeping

Your accounting software will handle this calculation for you when it generates your company’s balance sheet, statement of retained earnings and other financial statements. Retained earnings represent the cumulative net income earned by a company that has been reinvested into its operations. As a crucial component of the shareholders’ equity, understanding retained earnings https://www.online-accounting.net/ can…

At the end of the accounting year the balances will be transferred to the owner’s capital account or to a corporation’s retained earnings account. Whenever cash is received, the asset account Cash is debited and another account will need to be credited. Since the service was performed at the same time as the cash was…

Another difference is the accounting treatment in which different assets are reduced on the balance sheet. Amortizing an intangible asset is performed by directly crediting (reducing) that specific asset account. Alternatively, depreciation is recorded by crediting an account called accumulated depreciation, a contra asset account. The historical cost of fixed assets remains on a company’s…

There are several different depreciation methods and each has its own calculation. The most common method is the straight-line method, which basically involves expensing the same amount for each accounting period. The straight-line method is calculated by subtracting the salvage value from the asset’s purchase price and then dividing the resulting figure by the projected…

Accounting takes that information and expands on it through analyzing and interpreting the data. This individual usually holds an accounting degree and is registered as a certified public accountant (CPA). To use that title, CPAs must pass the CPA exam—which is a highly valued https://wyomingdigest.com/navigating-financial-growth-leveraging-bookkeeping-and-accounting-services-for-startups/ credential in the accounting industry. You can become a bookkeeper…

Higgins Corporation budgets for a monthly manufacturing overhead cost of $100,000, which it plans to apply to its planned monthly production volume of 50,000 widgets at the rate of $2 per widget. In January, Higgins only produced 45,000 widgets, so it allocated just $90,000. The actual amount of manufacturing overhead that the company incurred in…