Category: Bookkeeping

Businesses use notes receivable to secure payments from customers or others, but it can reduce cash flow in the short term. Often, a business will allow customers to convert their overdue accounts (the business’ accounts receivable) into notes receivable. By doing so, the debtor typically benefits by having more time to pay. A note receivable…

MacGyver might have had the television show, but when it comes to working with what’s at hand to get a job done, few people are better at this than farmers and ranchers. We’ve become accustomed to improvising and making what we have work when the right tools or resources aren’t always available. Someone on our…

A parent company might own all of a subsidiary or achieve control by having a majority ownership stake (i.e., over 50%). A subsidiary differs from a division, which is not a separate legal entity as far as liability, regulation, and taxation are concerned. A subsidiary must not be confused with an affiliate either, which is…

Proper record-keeping helps businesses to monitor their financial health, identify areas of improvement, and make informed decisions. By using double-entry bookkeeping, companies can ensure that their financial statements are accurate and complete. The balance sheet, which is one of the primary financial statements, shows the total assets, liabilities, and equity of a company at a…

The tax and compensation reports are used to understand the financial standing of the entity. The performance of an entity, business compliance status, compensatory factors, financial status, and more are assessed in a quarter. Line 4 Check this box if employee wages are not subject to certain taxes. If you’re an employer, you must complete and…

Put simply, a company with an acid-test ratio of 1 or more has enough liquid assets to cover its current liabilities. If the company had to pay off all its current liabilities immediately, it could do so without resorting to selling its non-liquid assets. Quick assets for this purpose include cash, marketable securities, and good…