Category: Bookkeeping

However, some industries have a much higher quick ratio requirement such as the technology sector which can be as high as 10 or 12. Quick Ratio is also known as the acid-test ratio or liquidity ratio. Someone on our team will connect you with a financial professional in our network holding the correct designation and…

The profitability index can also get referred to as the benefit-cost ratio. Even though some projects have higher net present values, they might not have the highest profitability index. It can be helpful to calculate the net present value prior to calculating the profitability index. Profitability Index Calculator: Quick & Accurate Investment Analysis The Profitability…

Adjusting entries are prepared at the end of an accounting period to consider income or expenses that have not yet been recorded in the general ledger. As a result, these entries can be for accrued expenses, accrued revenues, prepaid expenses, deferred revenues, and depreciation. However, reconciling individual account balances becomes extremely easy with online accounting…

Taxation is a key area where LLCs and S corporations differ significantly. By default, LLCs can be taxed as sole proprietorships or partnerships, depending on the number of members. This means that the LLC’s income is passed through to the owner’s tax return, and the owner is responsible for paying taxes on the profits at…

Accounting is the process of keeping track of all financial transactions within a business, such as any money coming in and money going out. It’s not only important for businesses in terms of record keeping and general items that make up merchandise inventory business management, but also for legal reasons and tax purposes. Though many…

Use accounting software to track payment due dates and follow up on overdue payments to avoid cash flow issues. Without consistent financial reports, it’s challenging to understand project profitability and make informed decisions. Manual reporting methods are time-consuming and prone to errors, resulting in inaccurate data. Direct and indirect expenses This may include service work,…

The present value of money and cash flows, which are often crucial components of sustaining a firm, are not taken into account by ARR. The accounting rate of return is a capital budgeting metric to calculate an investment’s profitability. Businesses use ARR to compare multiple projects to determine each endeavor’s expected rate of return or…

These costs don’t fluctuate with the level of production or sales an item makes—which is why they’re sometimes called fixed production costs. No matter how much a company sells, the office rent still needs to be paid—so this is a fixed cost. This means that the production of grapple grommets produce enough revenue to cover…