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A form of expensing a non physical asset over a reasonable life expectancy of this investment. Examples include start-up expenses, copyright purchase, patent issues, and goodwill.

Bookkeeping – Recurring Entries (Lesson 65)


Every day bills arrive from vendors that are mere repetition like the electric or phone bill.   They basically recur every so often (mostly monthly).   The bookkeeper must create a new entry as a part of his/her  daily functions.   This [...]

Cash Flow From Operations – Basic Formula


The cash flows statement in accounting is broken out into three major sections as follows: 1) Cash Flow from Operations 2) Cash Flow from Investing 3) Cash Flow from Financing Of the three, cash flow from operations is the most prominent.   It [...]

Bookkeeping – Other Taxes (Lesson 59)


There are several more taxes that small businesses must adhere to each year.   This lesson explains these other taxes including: * Real Estate Taxes * Business Property Tax * State Franchise Tax * State Licenses or Fees * Unique Production or [...]

Bookkeeping – Loan Accounting (Lesson 54)


Almost every small business borrows money.   The most common reason is to purchase a fixed asset of some sort.   The amount borrowed is most often a long-term liability.   There are several steps involved in recording the original loan and then [...]

Bookkeeping – Amortization (Lesson 53)


Amortization is similar to depreciation whereby an asset’s cost is allocated to the expense over time.   There are several differences with amortization.   Amortization is used with intangible assets and the method is almost always straight [...]



EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization.   The value is generally known as operational profit before capital expenditures and tax obligations.   EBITDA is frequently used for estimating value of [...]

Bookkeeping – Schedules (Lesson 23)


In accounting there are books (journals) and ledgers for source entry of information.  A trial balance is used to monitor the types of accounts.   With the use of parent-child accounts and control accounts bookkeepers can generate a wide array of [...]

Amortization of Financing Costs


When a business acquires a loan there are typically closing costs involved.   Generally Accepted Accounting Principles (GAAP) require these costs to be amortized (allocated) over the life of the loan.  There are several principles the reader [...]

Hospitality Industry Characterized by High Fixed Costs


There is one unique financial characteristic that is synonymous with the hospitality industry; that is high fixed costs.  Or another way of stating the same financial attribute is to simply state that the hospitality industry has low variable [...]

Tangible and Intangible – Business Definitions and Use


Tangible and intangible are terms with several different meanings.  A lot of well educated folks have a difficult time providing an all inclusive definition.  Someone once described tangible as ‘something that can be burned’.  Well, land is [...]
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