Allowances

There are several definitions for the term ‘allowances’.   In payroll, allowances are the amount of adjustments to an employees paycheck to determine the final federal income tax to withhold from each paycheck. An employee prepares a Form W-4 to determine the number of allowances in calculating the withholding amount. An allowance is similar to the number of dependents in your household. Single equals one, married equals two and add one for each child you care for in your household.  With sales, allowances refer to the amounts granted to a customer to solidify the sale or eliminate a return.

Construction Accounting Terminology

Construction Accounting Terminology

In construction accounting accountants and bookkeepers use certain terms and there are distinct meanings associated with these terms.  This article is designed to introduce beginner accountants and contractors to these terms from the perspective of financial reporting.

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