It is also an important element in explaining how such strategic decisions can affect overall profitability. Moreover, the comparison of gross margins across product lines improves effective portfolio management. To see how gross profit margins can’t always hold up in the long term, take a look at the airlines. Certain airlines hedge the price of … Read more
Amortization is usually conducted on a straight-line basis over a 10-year period, as directed by the accounting standards. A business client develops a product it intends to sell and purchases a patent for the invention for $100,000. On the client’s income statement, it records an asset of $100,000 for the patent. Once the patent reaches the end … Read more
So to locate these errors, accountants need to check each and every trade receivables account in the sales ledger carefully until the error is found or the fraud is detected. The cash book is totalled for the accounting period, and used to make a double entry posting to the general ledger. The cash payments are … Read more
All of these things affect your books, which is why it’s important to have a bookkeeper with a strong background in your industry. When filing for the R&D tax credit, you must submit the relevant tax forms to the IRS. However, you must also have the technical and financial justification of what you were claiming … Read more
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The company may need to adjust its allowance, recognizing a higher risk of uncollectible accounts. Under the direct method, you assume that your total receivables are collectible and show their full value with no contra account on the definition of “capital budgeting practices” balance sheet. If you later realize that an invoice is uncollectible, you … Read more