The balance sheet is a fundamental accounting report and forms the basis for many other reports. A balance sheet is a financial “snapshot” of your business at a given date in time. It includes your assets, liabilities, and your business’s net worth (also known as equity). The balance sheet will tell you about the financial health of the […]
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In an accountant’s reporting systems, depreciation of a business’s fixed assets such as its buildings, equipment, computers, etc. is not recorded as a cash outlay. When an accountant measures profit on the accrual basis of accounting, he or she counts depreciation as an expense. Buildings, machinery, tools, vehicles, and furniture all have a limited useful […]
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It would probably be ideal if business and life were as simple as producing goods, selling them and recording the profits. But there are often circumstances that disrupt the cycle, and it’s part of the accountant’s job to report these as well. Changes in the business climate, or cost of goods or any number of […]
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Depreciation is a term we hear about frequently, but don’t really understand. It’s an essential component of accounting, however. Depreciation is an expense that’s recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the course of business are called fixed assets. […]
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