Category: Report Analysis – How to Read the Statements
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Job Costing Reports – Introduction (Part 1)
Job costing reports are management tools used to evaluate project or production performance against a known or estimated standard.
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Profit and Loss Statement Using Class Accounting
Class accounting breaks down sales and the associated cost of sales into functional groups. Whether you use divisions or departments or product/service lines class accounting allows you to identify those more profitable areas of operations.
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Financial Statements for the Small Business
Financial statements serve the purpose of presenting economic activity and status related to a particular date and over a particular time frame. Accountants record monetary transactions and via financial reports present the information in an easy to understand format.
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Returns, Allowances and Discounts in Accounting
In the revenue section of every income statement (profit and loss statement) is an adjustment group to sales. This group reflects the value related to the actual sale of the product or services.
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Trial Balance – Purpose and Interpretation
The trial balance is an accountant’s report used to identify issues with the respective ledger accounts.
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Dividends and Distributions – Use in the Proper Context
Dividends and distributions refer to the payment of cash to investors. Why are there two separate terms? Well, the term is tied back to the type of entity that makes the payment.
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Accelerated Depreciation – An Explanation
Unlike traditional straight line depreciation where the asset value is costed out to depreciation expense in equal increments over a given life expectancy, accelerated depreciation expenses the cost at higher values during the earlier accounting periods and at a lower amount towards the last half of the asset’s life expectancy.
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Accrued Payroll – An Explanation
Accrued payroll is a current liability comprised of four sections. The first is the amount of payroll earned by staff and not yet processed or paid. The second is the dollar value of personal time off accumulated for each employee aggregated into one number.
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The Various Forms of Depreciation
There are various forms of depreciation used in the small business world. In general, depreciation is not required but it is advisable.
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What is Amortization?
Non-physical assets are expensed to the income statement or profit and loss statement via a method called amortization. It is most commonly used in the mortgage industry to refer to the monthly payment made to pay interest and the principal (the amortizable portion) on a debt instrument.