Tag: Profit and Loss
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P&L Statement – Best Format for Salons
An owner of a hair salon needs a well organized and properly formatted profit and loss statement (income statement) to properly evaluate performance. There are multiple presentation formats used in the service industry, but after 25 years of accounting I advocate for the functional presentation arrangement. This form of a profit and loss statement allows…
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Bookkeeping – Proper Income Statement Presentation (Lesson 21)
The income statement presents information over a period of time. This time period is referred to as an accounting cycle.
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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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Apartment Complex Profit and Loss Statement – (Revenue Section) Best Presentation Format
In the apartment complex industry I have had the privilege of reviewing four different presentation formats prepared by different Certified Public Accounting Firms.
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Cost of Sales – Various Formats
Many business owners misunderstand the use of term ‘Cost of Sales’ by restricting it to just simply ‘Cost of Goods Sold’. Basically, most business entrepreneurs and even accountants don’t realize that it has several different names and presentation formats. But it is essentially costs of sales.
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Cost Drivers in Small Business
The textbook answer defines cost drivers as those factors that determine the overall cost of operations. As an example, in manufacturing the cost drivers may be processing time or number of steps to produce the product. With service, the cost drivers could be the actual ratio of billable to non-billable time.
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Profit
Profit refers the earnings from the business operations. It customarily means the bottom line of the business income statement or its profit and loss statement. For many business owners, it refers to the amount earned before income taxes are paid. However, this is not correct.
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Deferred (Unearned) Revenue – Definition and Accounting Procedures
Deferred or unearned revenue is an advance payment made by a customer for a product or service that has not yet been rendered (delivered).
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Format of the Profit and Loss Statement for Service Related Businesses
Service related businesses require a different format than the traditional profit and loss statement AKA the income statement. The traditional profit and loss focuses on sales of products and a corresponding cost of goods sold section to help the reader evaluate the gross margin. But in service, the owner needs a profit and loss statement…
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How Much is a Fair Profit? Part I of V – Owner Compensation
A fair profit for a small business is between 9% and 37%.