Basic Accounting

Many of small business owners would rather focus on making and selling their products than on keeping their books and records. However, bookkeeping is just as important as marketing and doing business. Many a great business ideas has failed due to a poor bookkeeping system. And ultimately, won’t be keeping up if money going out is more than money that is coming in. Apart from business owners desire to stay in business, two other reasons why book keeping system is most important Read more

One of the basic gray areas we experience in distribution is the concept of cash flow. What is cash flow? The term is tossed around but rarely used precisely or discussed in a practical manner.

In laymans terms, cash flow is basically the cash received (coming into the business) over a specific time period less the cash going out of the business in the form of payments. You have a positive cash flow when the cash received exceeds the cash paid out: a simple concept. Ho Read more

According to American Accounting Association, Committee on Accounting Concepts and Standards, “Revenue is the monetary expression of the aggregate of products or services, transferred by an enterprise to its customers during a period of time.”

Capital and revenue receipts

Capital receipts of business comprise of capital contributed by partner or by the shareholders; loans ; sale proceeds of any fixed asset, etc. In case of clubs and associations, r Read more

It’s April 15th and taxes are due once again. Each year millions of small business owners go about their business without thinking about getting a system in place for tax time. Are you organized or are you sweating bullets as the deadline nears?

Usually small business owners myself included have a file stuffed with receipts. They are usually all mixed together not categorized at all. Sure we have the best intentions when we start the year off, but then things get busy and Read more

Financial accounting’s focus is on the financial reports distributed to people outside of the company. The major component of financial reporting is the financial statements: income statement, balance sheet, statement of cash flows, and the statement of stockholders’ equity. The income statement indicates a company’s profitability during a specified time period such as one year, three months or one month.

Under accrual accounting the income statement reports the amo Read more

In this web article we will also discuss:

1. Nature of Reserves or Provisions

2. Differences between reserves and provisions

3. Secret Reserves

Provisions are for known liability or losses, the amount of which cannot be determined with substantial accuracy. In order to ascertain, profit or loss as accurately as possible, it is necessary to make careful estimates of the amounts of such known liabilities Read more

“You never know what is enough unless you know what is more than enough.” This famous quote by James Agee seems very true and very realistic and the most interesting point is that this quote seems to fit into any facet of the world. We humans have a tendency to bind our thoughts and ourselves to a limit after which we feel we can not survive. After a point we tend to feel that whatever we have done is enough for us and that there is nothing more left for us to explore. We have Read more

A bank statement reconciliation or “bank rec” is an important step in maintaining the accuracy of your financial records. When a bank rec is getting you down, it might help to recall this simple rule: PUT IT WHERE IT ISN’T.

Here are three unrelated items to illustrate this easy-to-remember rule:

Item 1. The bank statement shows a maintenance fee of $6.00. Since this bank fee is shown on the bank statement, you need to PUT IT WHERE IT Read more

The amount saved is set aside for any of the following five purposes:

(a) for meeting future liability or loss;

(b) for strengthening the financial position of the business;

(c) for fulfilling some specific purpose;

(d) for redeeming a liability;

(e) for replacing a wasting asset.

(f) There are two ways in which the amount available for distribution as profit can be reduced:

(1) Indirectly, i.e.. out of gross profit or by debiting profi Read more

Selling used servers and technology assets is an excellent way to raise cash and free up
storage space. However, many companies make mistakes that can be very costly and time consuming.

To achieve the highest payout for your technology hardware make sure that you work with an asset recovery firm that has a well established network. It is no secret
that the company that buys your equipment only profits when the technology is resold.
Therefore only technology buyers th Read more