Bookkeeping

You may also see non-GAAP reporting in the same documents, which simply means that those pages are prepared using some kind of optional reporting that does not adhere to the GAAP rules. US GAAP vs. IFRS: Key Differences and Global Impact Therefore, firms adhering to the IFRS generally exhibit higher accounting quality than when they…

The double-entry accounting method has many advantages over the single-entry accounting method. First and foremost, it provides an organization with a complete understanding of its financial profile by noting how a transaction affects both credit and debit accounts. It also makes spotting errors easier, because if debits and credits do not match, then something is…

The debit entry will be recorded on the debit side (left-hand side) of a general ledger account, and the credit entry will be recorded on the credit side (right-hand side) of a general ledger account. If the total of the entries on the debit side of one account is greater than the total on the…

In essence, the payback period is used very similarly to a Breakeven Analysis, but instead of the number of units to cover fixed costs, it considers the amount of time required to return an investment. The decision rule using the payback period is to minimize the time taken for the return on investment. Average cash…

It describes the leftover earnings when federal and state taxes, including withholding taxes, are subtracted from the gross earnings. After-tax income represents the earnings left over after deducting all applicable taxes, providing a clear picture of available disposable income. After-tax contributions to retirement accounts are made from income that has already been taxed. However, instead…

The parent may want to sell the property at a deep discount in order to avoid paying taxes or to simply give the child a great deal on their first home. As a result, the transaction price of the property in this example is below fair market value. Another example of a relationship is two…

It can be regarded as the very basis of maintaining accounts for any particular organization. On the balance sheet, the assets side represents a company’s resources with positive economic utility, while the liabilities and shareholders equity side reflects the funding sources. This equation sets the foundation of double-entry accounting, also known as double-entry bookkeeping, and…