Recent Articles

Current Liabilities

A section of the Liabilities and Equity side of the balance sheet. It refers to accounts payable, credit card debts, short term debts, and payroll items owed to staff or taxes owed.

Working Capital Management – Production and Sales Flow


There is no single management style to address the multitude of working capital cycles existing in the various business sectors and the underlying industries.   Taking raw resources and turning them into consumer goods has different time frames [...]

Bookkeeping – Franchise Fee and Revenue Taxes (Lesson 57)


Lesson  56 through 59 cover various business and income taxes along with the appropriate bookkeeping functions.   This lesson focuses on the accounting procedure for franchise fees and the formula used for revenue taxes    What is interesting [...]

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 [...]

Current Ratio


The current ratio is an inappropriate relationship to use or rely on in small business.   The ratio is best suited for large publicly traded organizations.   This article explains the basic formula for the current ratio, how to identify the ratio [...]

Bookkeeping – Cash Disbursements (Lesson 45)


Cash disbursements is the process of remitting payment to vendors, suppliers and third party contractual obligations.   Better managed offices pay bills in regular cycles including weekly and monthly obligations.   Preparation, reconciliation and [...]

Bookkeeping – Purchases Via Credit Cards (Lesson 42)


It is more common in small business, especially small contractors, to buy materials using credit cards.  Often the credit card accounts are the owner’s personal accounts.  Sometimes the cards are merchant cards.  As the bookkeeper it is your [...]

Bookkeeping – Tracking Purchases (Lesson 41)


In business purchases describes the process of acquiring the necessary goods and materials for operations.  Many novice business individuals believe the term is strictly limited to those materials purchased for resale.  In reality it is much [...]

Bookkeeping – Tracking Sales Tax (Lesson 40)


Many businesses especially retail have to collect sales tax as a function of their legal mandate from state governments.  In effect the business is a collection agent for the state.  If properly set up, this collection process is automated using [...]

Working Capital Cycle


The college textbook definition of working capital is current assets minus payables and accrued expenses.  The term explains the dollar value of flexibility a business operation has to take advantage of immediate opportunities or endure sudden or [...]

EBITDA – Buyer Beware (Case Study)


In the article EBITDA the fundamentals of Earnings Before Interest, Taxes, Depreciation and Amortization were introduced.   In general EBITDA is commonly used with the market comparable valuation approach.   In that article it was illustrated how [...]
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