Tag: Sections of the Balance Sheet
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Construction Accounting – Balance Sheet Construction in Process Accounts
Construction accounting consists of three major groups of accounts. The first and most understood set are the cost of construction accounts found on the profit and loss statement.
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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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Chart of Accounts – Layout
The goal of accounting is to record the economic activity of the business. This is achieved by entering each economic transaction into a set of books. The books are formatted to reflect the balance sheet and income statement items. The chart of accounts is designed to present the information in the prescribed format.
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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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The Different Types of Bank Loans
There are many different types of bank loans, each having their own respective purpose. All bank loans are categorized into two distinct groupings.
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What is Accrual Accounting?
Accrual accounting is the preferred method of accounting for all business operations. Any publicly traded company must comply with the principles of accrual accounting. Small business operations can choose between cash and accrual accounting for their records. Although cash accounting is the easiest to work with as a small business operation, accrual accounting will provide a more…
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Completed Contract Method of Accounting in the Construction Industry
The completed contract method of accounting recognizes revenue and the associated costs once the project is complete. This is one of the two popular accounting methods used in the construction industry. For residential contractors, the completed contract method may have a slight tax advantage by deferring revenue recognition but is generally not considered the best method of…
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Small Business Model Series Entry #4 – Basic Research
I spent a lot of time on the internet researching the industry as a whole. There are about 220,000 machines in the US that are owned by non-banking companies and individuals. My first thought is that this is about 1 machine per 1,000 individuals (there’s about 220 million adults in the US/220 thousand machines and you…
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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.
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How to Find Investment Capital – The Family Connection
There is one responsibility of all business entrepreneurs that is loathed more than any other. It’s asking for money. First off, you have to find financial resources and then you have to ask for investment capital.