Recent Articles

Fixed Assets

These are large ticket purchases that have an extended utilization life. They are not typically sold in the due course of business and as such they are expensed through a system called depreciation.

Fixed Assets To Debt Relationship

12/08/2015

Every business owner, especially young entrepreneurs, must understand how long-term debt  is used to finance the purchase of fixed assets . It is a basic principle especially for start-ups. There is a relationship that exists between the two. If [...]

Internal Controls – Fixed Assets

07/06/2015

Internal controls is an accounting system to aid in proper reporting of existing assets and liabilities.  Internal controls over fixed assets alleviate two distinct risks.  The primary risk is physical in nature and relates to the asset getting [...]

Capital Gains – Introduction to Fundamentals

04/03/2015

When an individual or business sells an asset, the gain or loss is classified into one of two distinct tax groups – ordinary or capital.  The tax classification is strictly tied to the nature of the asset sold.  For most businesses, the assets [...]

Tangible and Intangible – Business Definitions and Use

11/03/2014

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 [...]

Book Value – Definition and Usage

05/15/2014

There are several definitions associated with the term ‘Book Value’ and depending on the context of its use, determines the correct definition and proper use.  The three primary uses of the term are as follows: Stock, Corporate Value or Balance [...]

Lease or Buy

02/11/2014

Fixed assets are normal in business operations.  However, financing those assets is the critical issue.  If you buy the asset outright, you tie up capital that can be used to expand operations or keep overall costs low in operating the company.  [...]

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 [...]

The Fixed Assets Section of the Balance Sheet

09/24/2013

The fixed assets section of the balance sheet is one of the easiest sections to read and understand.  This article is written to describe and illustrate some simple examples of the fixed assets section.  I am not teaching the reader about the [...]

Create a File Structure for Accounting

01/18/2013

Creating a file structure for accounting is critical for the overall success of the business.  If properly structured, data retrieval and information access add to the overall value of the company.  This article teaches the new business owner how [...]
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