Category: Bookkeeping

Double-declining-balance method To apply the double-declining-balance (DDB) method of computing periodic depreciation charges you begin by calculating the straight-line depreciation rate. To do this, divide 100 per cent by the number of years of useful life of the asset. Next, apply the resulting double-declining rate to the declining book value of the asset. At the…

When establishing the Provision for Income Tax, several critical factors come into play. These considerations ensure the provision accurately reflects the entity’s tax obligations and aligns with accounting standards. This example illustrates how a business estimates and records its tax obligations, ensuring that financial reports provide a realistic view of profitability after accounting for taxes.…

When you visit a website, your browser stores certain elements, such as images, stylesheets, and scripts, in the cache. This allows the website to load faster the next time you visit, as the browser can retrieve the necessary files from the cache instead of re-downloading them from the internet. Clearing your cache will delete any…

The T-account is the visual representation of an account. And if you look at the accounting equation, you’ll see the T-account hiding in plain sight. He has $30,000 sitting in inventory and buys another 5 computers worth $10,000. Assume he bought the computers with cash and his starting cash account had $25,000 in it. The…

We are given opening stock, closing stock, and purchases; therefore, we can use the below formula to calculate the cost of sales. The Gross profit was reported as better than in the previous quarter. The company reported 230,000 as of the opening stock, 450,000 as closing stock, and 10,50,000 as net purchases. You are required…

This ensures that financial statements align with the actual period of economic activity. This principle ensures that financial statements reflect the economic reality of transactions rather than just their legal form. IFRS focuses on the true financial impact rather than how a transaction is structured legally. Past initiatives include the Norwalk Agreement and various joint…

Alright, now let’s see what happens when we finally sell an available for sale security. So note that the realized gains or losses for any security, any security that we have, they’re always going to show up on the income statement when we have a realized gain or loss. So if the selling price of…

Net pay, also known as take-home pay, is the final amount that employees receive in their paycheck after mandatory and voluntary deductions. It represents the actual earnings employees can spend, differing from gross pay, which is the total earnings before any deductions. Calculating net pay involves subtracting various payroll deductions from the employee’s gross pay,…

It also eliminates the need to hire additional staff to manage finances, thus reducing labor costs. The bookkeeping platform gives you real-time access to essential financial information like cash flow, revenue growth, profit margins, etc. This allows you to make quick decisions based on current financial data without wasting time waiting for updates from the…

Let’s take a look at some instances where your organization might need an audit. How can independent audits benefit my nonprofit? Instead, it is a decision to take proactive ownership of your organization’s financial health, transparency, and validity by hiring a professional to examine your books. And many federal and state agencies require audits, depending…