Cash flows refer to the movement of money into and out of a business or individual’s finances. They can fall into operating, financing, and investing cash flows. Similarly, cash flow statements provide a snapshot of these cash inflows and outflows, helping assess financial health and liquidity. The primary source of …

The balance sheet is crucial as it provides a comprehensive overview of a company’s financial position. It is the primary tool for assessing the company’s stability, financial health, and overall worth. By analyzing the balance sheet, stakeholders gain insights into the company’s assets, liabilities, and shareholders’ equity, enabling them to …

Certified payroll is crucial for contractors or subcontractors working on government-funded projects. Employee compensation records are the exact details of how much each worker is paid for their work on a project. The purpose of certified payroll is to ensure workers are paid fairly and in compliance with wage laws. …

An income statement is a financial statement that shows a company’s revenues, expenses, gains, and losses over a specific period. It reflects the company’s ability to generate profits by comparing revenues with expenses. Similarly, it helps evaluate profitability, cost management, and overall financial performance by revealing the net profit or …

What is a Personal Balance Sheet? A personal balance sheet is a financial statement that provides a snapshot of an individual’s financial situation by presenting their assets, liabilities, and net worth at a specific point in time. It provides a comprehensive overview of what a person owns and owes and …

Depreciation refers to the systematic allocation of the cost of a tangible asset over its estimated useful life. It is an accounting method used to recognize and distribute the expense of a resource over time. Depreciation helps match the asset’s cost with the revenue it generates and considers factors such …

Manufacturing and construction companies typically use the exponential depreciation formula when calculating the depreciation of their fixed assets. For companies that make long-term investments in large equipment and machinery, it’s important to use a formula that considers how the value of the asset decreases with time. This way they can …

A balance sheet is a financial statement that presents a snapshot of a company’s financial position at a specific moment. It has three main components: assets, liabilities, and shareholders’ equity. Assets represent what the company owns, liabilities represent its obligations, and shareholders’ equity represents the residual interest of shareholders in …

The cost of goods sold (COGS) refers to the direct costs incurred by a company in producing or acquiring the goods it sells during a specific period. It includes all the costs directly associated with goods, such as raw materials, direct labour, and manufacturing overhead. Companies may divide this amount …

Companies in the services industry earn revenues through the fees they charge their clients. However, not all of these fees may qualify as “earned”. Therefore, it is crucial to understand how it works. What are Fees Earned? Fees earned refer to revenue a company or individual receives for providing a …