Author: David J Hoare MSA
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Bookkeeping – Temporary Accounts (Lesson 78)
Temporary accounts are financial and process control tools used by management to achieve financial goals. They are composed of internal, regulator and restrictive accounts. They are opened at the beginning of an accounting period and closed prior to the end of an accounting cycle.
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Bookkeeping – Cost Accounting (Lesson 77)
The science of calculating the actual costs of manufacturing is known as cost accounting, a.k.a managerial accounting. Unlike traditional accounting which records economic transactions after they occur, cost accounting identifies all underlying costs associated with the production of a single unit.
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Cash Flow From Operations – Understanding Cash Flow (Part II)
To understand the cash situation, the cash flow from operations is an additional report included in financial statements to basically convert the accrual basis balance sheet and income statement into a cash basis report.
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Bookkeeping – Retail Accounting with Item Tracking (Lesson 76)
The retail business is interested in what sells well, not how well something performs against an estimate (project accounting). The retail business uses a different type of accounting to analyze financial performance.
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Bookkeeping – Completed Contract Accounting (Lesson 75)
A second and easier method of accounting with project accounting (construction) is the completed contract method. This method does not utilize an engineering or detailed production schedule (chart) like the percentage of completion method. It works well with any duration for project timelines.
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Bookkeeping – Percentage of Completion Method (Lesson 74)
In project accounting there are two different methods of accounting used. The first is the completed contract method which is explained in more detail in Lesson 75. The second and the focus of this lesson is the percentage of completion method of accounting. This method is an advanced skill for accountants and requires knowledge of its proper…
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Bookkeeping – Phase Costing (Lesson 73)
Phase costing takes accounting to the next level. Phase accounting (costing and accounting are interchangeable at this level of detail) can only be used with job costing. It is designed to break a job down into distinct functions (stages) for analysis. It is a tool to identify discrepancies from estimates.
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Bookkeeping – Project (Job) Costing (Lesson 72)
Another tool used by accountants to evaluate financial performance is project costing. It is also referred to as contract or job costing. Job costing focuses on a specific long-term project customarily associated with a contract signed with a customer.
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Basis in Business
Basis is a business term used to identify the value of an individual or entity’s investment in an entrepreneurial endeavor. It is customarily linked to taxation as this term is used by the Internal Revenue Code to determine gain or loss. To further compound its meaning ‘basis’ is sometimes substituted for the term ‘equity’.
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Tenancy in Partnership
Tenancy in partnership is an important principle in understanding an individual partner’s ownership right as it relates to the partnership and the law of partnership. Does he own the assets jointly or as tenants in common?