Balance sheets can be used with other important financial statements to conduct fundamental analysis or calculate financial ratios. The operating activities on the CFS include any sources and uses of cash from running the business and selling its products or services. Cash from operations includes any changes made in cash accounts receivable, depreciation, inventory, and accounts… Read More
Billionaire Carl Icahn’s Top Stock Offers a Mind-Boggling Dividend Yield of 22% and Wall Street Thinks It Will Skyrocket 45% in 2024 The Motley Fool
by • March 5, 2020
The common stock dividend distributable is $50,000 — calculated by multiplying 500,000 x 10% x $1 — since the common stock has a par value of $1 per share. When the small stock dividend is declared, the market price of $5 per share is used to assign the value to the dividend as $250,000 —… Read More
Other Comprehensive Income: What It Means, With Examples
by • December 8, 2023
AOCI represents accumulated other comprehensive income and is stated at a point in time. OCI represents current year gains and losses that were not recognized in the income statement. In March 2018 the Board published its Conceptual Framework for Financial Reporting. A common misunderstanding is that the distinction is based upon realised versus unrealised gains…. Read More
Accounting Principles Explained: How They Work, GAAP, IFRS
by • March 17, 2020
The reliability principle states that you should only record those transactions for which you can obtain objective evidence (such as a supplier invoice). If there is no evidence of a transaction, you would have a difficult time proving it to an outside auditor. Sometimes, transactions for which there is insufficient evidence will instead be documented… Read More
How To Record Owner Contribution Using Jornal Entry
by • July 3, 2020
S Corporations have to pay attention to the company’s stock basis. If the basis doesn’t go negative, they can distribute profit to shareholders. If distributions are made in excess of basis, or when there is a loss then the S Corp didn’t have enough basis to cover the loss. In this situation, only part of… Read More
What is a Deferral Type Adjusting Entry?
by • May 2, 2023
The adjusting entry is made when the goods or services are actually consumed, which recognizes the expense and the consumption of the asset. Deferred revenue is a liability for the business because it represents a future obligation to provide goods or services. Even though receiving prepayment may feel like an asset, it’s crucial to remember… Read More
Variable Versus Absorption Costing
by • March 5, 2020
Absorption costing is in accordance with GAAP, because the product cost includes fixed overhead. Variable costing considers the variable overhead costs and does not consider fixed overhead as part of a product’s cost. It is not in accordance with GAAP, because fixed overhead is treated as a period cost and is not included in the… Read More
Non-Operating Income: Definition, Examples, and Purpose
by • March 26, 2020
Operating income does not include money earned from investments in other companies or nonoperating income, taxes, and interest expenses. Also excluded are any special or nonrecurring items, such as acquisition expenses, proceeds from the sale of a property, or cash paid for a lawsuit settlement. Examples of non-operating income include dividend income, asset impairment losses,… Read More
What is relevant range?
by • May 5, 2023
The anticipated profits and losses are likely to be realized as long as their operations are within the relevant range. A company’s assumption may benefit from keeping the pertinent range close to the level of current activity. We have established that fixed costs do not change in total as the level of activity changes, but… Read More
Cost Center Definition: How It Works and Example
by • March 5, 2020
Examples of cost centers might include the marketing department, human resources, or the IT division. Cost centers are vital in tracking expenses and allowing managers to optimize operations within that area, using business optimization blueprint tools like Wafeq to ensure financial control and alignment with company objectives. Cost centers come in handy here because adding… Read More