Recent Articles

Capital Expenditures

A financial concept addressing the cost associated with big ticket items including technology equipment, vehicles,and real estate. Often money is raised through the sale of stock and/or borrowing money from a financial institution. This term ties to other terms such as ‘Debt Service’, ‘Interest on Debt’ and so on.

Bookkeeping – Introduction to Depreciation (Lesson 50)

03/12/2017

Depreciation is the process of allocating the initial capital outlay for fixed asset purchases over time to the income statement.   The basic principle is that any fixed asset has a predetermined lifetime based on time, usage or fair market value. [...]

Replacement Reserves- Understanding the Fundamentals

04/09/2016

Long term and short term housing rental businesses use a financial operations tool to maintain, repair and upgrade the physical facilities.  This tool is known as replacement reserves in the real estate industry.  In almost all cases it is a [...]

Gross Domestic Product (GDP)

06/30/2014

Gross Domestic Product is defined as the total production for the country.  It is measured by including all the dollars spent to purchase products/services from all the various sellers of goods.  The largest purchaser of products/services is [...]

Capital Expenditures – IRS Definition

01/21/2014

The Internal Revenue Service uses a complex definition to identify capital expenditures (assets).  A capital expenditure is not deductible as an expense in the tax year purchased; the taxpayer or entity must use depreciation, amortization or [...]

Internal Revenue Service (IRS) Definition of an Expense

04/03/2013

The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’.  Ordinary expenses are those costs typically incurred in your industry.  So a restaurant would not ordinarily purchase vaccines.  And a medical [...]