Thanks to GAAP, there are four basic financial statements everyone must prepare . Together they represent the profitability and strength of a company. The financial statement that reflects a company’s profitability is the income statement. The statement of retained earnings – also called statement of owners equity shows the change in retained earnings between the beginning …
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4 Bank Reconciliation Statement Problems & Solution Example Read More »
But the limited enrollment window and the premium subsidies remained unchanged, (and premium subsidies grew more substantial starting in 2021, under the American Rescue Plan). These factors have been the key to preventing a widespread death spiral in the individual market. When the ACA was drafted, ensuring access to individual market coverage for people inventory …
This connection between the income statement and balance sheet is important. For one, it keeps the balance sheet and the accounting equation in balance. Secondly, it demonstrates that revenues will cause the stockholders’ equity to increase and expenses will cause stockholders’ equity to decrease. This will mean the revenue and expense accounts will start the …
Balance Sheets 101: What Goes on a Balance Sheet? Read More »
Taxes paid by the citizens directly to the government are direct taxes. For example, income tax, corporate tax, etc., are categorized as direct taxes. Taxes paid by the people but not directly collected by the government are indirect taxes. Generally, for tax purposes, nexus is understood to mean a physical presence, such as a warehouse, …
The coupon rate can be calculated by dividing the annual coupon payment by the bond’s par value. To calculate the interest payment on a bond, look at the bond’s face value and the coupon rate, or interest rate, at the time it was issued. The coupon rate may also be called the face, nominal, or …
Cash over occurs when there is more cash on hand than what was expected/recorded in a company’s general ledger. A company uses a cash over and short account to show a discrepancy between the company’s sales records and other reported figures and its audited accounts. For example, if the cash in the register is less …
For example, in industries like grocery stores and retailers, whose primary asset is inventory, they need to sell their stock as fast as possible to maintain a profit. Management decisions to use a labor-intensive rather than a capital-intensive approach can affect this ratio. Companies that operate in a capital-intensive environment have a more extensive asset …
Fixed Asset Turnover Overview, Formula, Ratio and Examples Read More »
This includes expense reports, cash flow and salary and company investments. Double-entry accounting uses the accounting equation to show the relationship between assets, liabilities, and equity. When you use the accounting equation, you can see if you use business funds for your assets or finance them through debt. The accounting equation is also called the …
Accounting Equation Explained Definition & Examples Read More »