Business Principles Accounting

Accounting’s primary principle is the measurement of economic activity. The American Institute of Certified Public Accountants provide the concepts and principles in measuring economic activity and how those financial transactions are recorded.

Liquidity Ratios

Liquidity Ratios

Liquidity ratios are a group of ratios used to measure the ability of a business operation to meets its current obligations.   Liquidity ratios are similar to the initial medical tests a patient receives at a doctor’s visit.   Doctors take blood pressure, temperature, and pulse rate.   The doctor wants assurance that the primary indicators of health are good.  Liquidity ratios are exactly the same.  The user wants to know that the basic measurements of a business indicate good health today.

Class Accounting With QuickBooks

Class Accounting

Class accounting is one of the options available with QuickBooks software.   Most accountants and bookkeepers misunderstand its purpose and how to properly implement this wonder tool of accounting.   If you are considering using class accounting and want to have a full comprehensive understanding, this is the article for you. 

Insolvency – Detection

Insolvency

Insolvency refers to the ability to pay bills in a timely manner.  It does not mean bankruptcy but long-term insolvency is a underlying factor of bankruptcy.  Many owners and/or managers of small business have no idea of how to determine if the company is insolvent or headed towards the inability to meet their day to day obligations.

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Bookkeeping – Policies and Procedures (Lesson 96)

Policies and Procedures

At the peak of the hierarchy of internal controls sits policies.   Policies are written by the highest echelon of management for a company, its Board of Directors or Trustees.   The upper tier and mid level management of a business develop procedures to carry out the policies of the company. 

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Bookkeeping – Controls in Accounting (Lesson 95)

Controls in Accounting

Just as manufacturing uses controls to ensure quality of product, controls are used in accounting to generate accurate information, maintain security over assets and comply with Generally Accepted Accounting Standards. The company implements various controls to assure accurate and timely information. 

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Bookkeeping – Employer Provided Vehicle (Lesson 94)

Employer Provided Vehicle

With small business it is very common to provide a vehicle to the owner and key employees.  It is often done in the construction industry and transportation sector.   The idea is to provide transportation for not only the convenience of the employer but as retention tool for employees.

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