Category Archives: Bookkeeping

Annual columns provide year-by-year comparisons of current and fixed assets, as well as current short-term and long-term liabilities. By reviewing this information, you can easily determine your company’s equity. This balance sheet template includes tallies of your net assets — or net worth — and your working capital. A balance sheet is a financial document […]

Thus, the total manufacturing cost for producing 1000 packets of bread comes out to be as follows. The contribution margin is not necessarily a good indication of economic benefit. Companies may have significant fixed costs that need to be factored in. The formula to calculate the contribution margin ratio (or CM ratio) is as follows. […]

Various accounts and transactions are to be recorded in their respective ledgers. On the other hand, an invoice payment represents an amount the customer owes, and they must eventually pay it. A credit memo just lowers or eliminates the amount they owe; it doesn’t replace it with anything else. A credit memo is also commonly […]

Ledgers serve as the backbone of the accounting system, acting as the repository where all financial transactions are systematically recorded. They provide a structured way to organize financial data, ensuring that every transaction is accurately reflected in the company’s financial statements. By categorizing transactions into specific accounts, ledgers facilitate a clear and comprehensive view of […]

We’ll review what each of these terms mean and why they’re important to understand as a home buyer and homeowner. Whether you’re a new homeowner or first-time home buyer, you may have heard the terms “assessed value” and “appraised value” thrown around by your loan officer or real estate agent. By providing your contact information […]

Let’s lock this line in place, and attach springs between the data points and the line. In this section, we’re going to explore least squares, understand what it means, learn the general formula, steps to plot it on a graph, know what are its limitations, and see what tricks we can use with least squares. […]

The idea behind the calculation is to minimize the sum of the squares of the vertical errors between the data points and cost function. The red points in the above plot represent the data points for the sample how to figure the common size balance-sheet percentages data available. Independent variables are plotted as x-coordinates, and […]

After an event is identified to have an economic impact on the accounting equation, the business event must be analyzed to see how the transaction changed the accounting equation. When the company purchased the vehicle, it spent cash and received a vehicle. Both of these accounts are asset accounts, so the overall accounting equation didn’t […]

Extended service contracts for appliances and electronics sell for a specific price, cover specific repairs and have a specific time frame within which you can get free or reduced price service. Deskera is an award-winning cloud-based accounting software that integrates directly with your business bank account. When revenue is recorded in the general ledger, there […]

The method used to recognize unearned revenue will depend on the type of business and the product or service being offered. As the company delivers the product or service, the liability decreases, and revenue is recognized. This means that unearned revenue will eventually become earned revenue, and the liability will be reduced to zero. A […]