By recognizing revenue and expenses differently, you can affect cash flow, profitability assessments, and investment decisions. Timing differences in accounting also play a role in financial decision-making. The recognition of revenue and expenses can affect cash flow and profitability assessments. Accruals involve tracking transactions over time and determining when revenue should be recognized or expenses … Read more
Or you can spot someone who hasn’t paid their invoice on time and gently suggest that you can’t do anymore work until you’re all square. And because each time you add a new supplier to the system you’ll be making note of their full contact details, you don’t have to worry about keeping an address … Read more
In the United States, certification requirements for accountants vary from state to state. But one requirement is universal—the passing of the Uniform Certified Public Accountant Examination. This exam is written and graded by the American Institute of Certified Public Accountants (AICPA). For most accounting and auditing professions, you’ll need at least a bachelor’s degree in … Read more
If the balance in the petty cash account is supposed to be $75, then the petty cash box should contain $45 in signed receipts and $30 in cash. Assume that when the box is counted, there are $45 in receipts and $25 in cash. This creates a $5 shortage that needs to be replaced from … Read more
The ratio may fall below 1 to 1, but Fillo says as long as that’s only an exception rather than a trend, a business is in good shape. He does warn that doing the calculation only annually may end up with you finding problems too late—and being able to take action to rectify the situation. … Read more