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Since the drawing account is not an expense, it does not show up on the income statement of the business. Liability can simple be defined as entity’s present obligation in respect of which payment is outstanding. Such payment can be made either in cash or in kind but the fact is that obligation exists and outflow of resources is inevitable. Liability may arise in the ordinary course of business as […]

The most common interim period is three months, or a quarter. For companies whose common stock is traded on a major stock exchange, meaning these are publicly traded companies, quarterly statements must be filed with the SEC on a Form 10-Q. The companies must file a Form 10-K for their annual statements. Retainer fees are money lawyers collect in advance of starting work on a case.There are also many non-cash […]

If you’re in the latter category, it may be time to think about hiring a bookkeeper who will do the reconciling for you. The more frequently you reconcile your bank statements, the easier it is each time. The balance recorded in your books (again, the cash account) and the balance in your bank account will rarely ever be exactly the same, even if you keep meticulous books. Bank reconciliations are […]

It shows the business makes more money than it spends on its capital costs, like loans or investments. Interpreting the ROCE ratio goes beyond just crunching numbers—it’s about understanding what those numbers say regarding your company’s efficiency in using capital to generate profits. Are you trying to figure out how efficiently your business is using its capital? Understanding the return on capital employed, or ROCE, is crucial for investors and business […]

Another way to illustrate this problem is to note that total borrowing cost is reduced by the $8,530 premium, since less is to be repaid at maturity than was borrowed up front. If a bond is issued at a premium or at a discount, the amount will be amortized over the years through to its maturity. On issuance, a premium bond will create a “premium on bonds payable” balance. Also, […]

If you haven’t been using bank reconciliation statements, now is the best time to start. A company prepares a bank reconciliation statement to compare the balance in its accounting records with its bank account balance. A bank reconciliation statement is a valuable internal tool that can affect tax and financial reporting and detect errors and intentional fraud. If you haven’t been using bank reconciliation statements, now is the best time […]