If you’re a contractor or construction business looking for accounting software that can easily help you manage your financials, then you don’t have to look any further. We’ve rounded up five of the best accounting software packages that are specifically designed to help contractors and construction businesses take control of their bookkeeping processes. With intuitive […]
To obtain a cash payout before the note reaches maturity, you can sell these notes to a bank or other financial institution for some price below the note’s face value. The contra asset account Accumulated Depreciation is deducted from the related Capital Assets to present the net balance on the parent account in a company’s […]
Understanding annual net income is essential for anyone navigating the corporate world. It gives a clear picture of an individual’s or company’s financial health, helping to make informed decisions. Let’s break down the key components that contribute to calculating annual net income. Cash flow management for small businesses It represents the total earnings of an […]
Regular workshops and updates on best practices help maintain a high level of competence within the team. Staff training programs should emphasize how to recognise signs of potential customer defaults, including late payments and changes in customer behaviour. Additionally, staff should understand the procedures for calculating the allowance for doubtful accounts and recording ledger adjustments. […]
The share premium account represents the difference between thepar valueof the shares issued and the subscription or issue price. Share premium, often referred to as additional paid-in capital, represents the amount that a company raises in excess of the par value of its shares. This financial metric is a testament to the market’s confidence in […]
Share premiums can lead to the overvaluation of a company, implying that the current price of the stock is not congruent with its earnings outlook or other fundamental factors. Additionally, the issuance of share premiums can result in the dilution of existing shares, decreasing the ownership percentage of existing shareholders. Share premiums arise when companies […]
This can be done if the company no longer needs the money in its share premium account and wants to use it for other purposes. Share premium accounts can be used for a variety of purposes, such as to pay off debt or to fund capital projects. For example, a company may use the money […]
When a doubtful account becomes uncollectible, it is a debit balance in the allowance for doubtful accounts. It’s important to note that an allowance for doubtful accounts is simply an informed guess, and your customers’ payment behaviors may not align. Companies create an allowance for doubtful accounts to recognize the possibility of uncollectible debts and […]
A write-off is different from an allowance for doubtful debt, which is an estimate made by a company of the value of accounts receivable that will not be collected. Sometimes, even in accounting, there are welcome surprises, e.g., when a previously written-off account pays unexpectedly. Perhaps a customer emerges from bankruptcy with some ability to […]
While the Direct Write-Off Method may be used in certain situations for simplicity or tax purposes, it is generally not preferred under GAAP. Uncollectible accounts, commonly known as bad debts, refer to amounts that a business deems unlikely to be collected from its customers. These are typically accounts receivable that have been outstanding for an […]
