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.

Bookkeeping – Complex Entries Expanded (Lesson 66)

07/16/2017

A journal entry with multiple lines of entry affecting several different ledgers (accounts) is commonly referred to as a complex entry.   Many bookkeepers shy away from them as they feel intimidated by the difficulty involved and do not want to [...]

Bookkeeping – Amortization (Lesson 53)

04/23/2017

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 [...]

Bookkeeping – Depreciation Schedules (Lesson 51)

03/19/2017

When a small business purchases fixed assets two financially based opposing forces come into play.  The first is the financial reporting desire to present information in a fair manner so management can make good financial decisions.  The opposing [...]

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. [...]

Bookkeeping – Fixed Asset Purchases (Lesson 49)

03/05/2017

Every now and then management authorizes the purchase of a long-term producing asset.  This could be a vehicle, piece of equipment or real estate.  These purchases are referred to as fixed assets.  Recording of these entries is a little different [...]

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 [...]
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