If your business is a sole proprietorship or a partnership, your next step will be to close your income summary account. You can do this by debiting the income summary account and crediting your capital account in the amount of $250. This reflects y... Read more
We do not need to show accounts with zero balances on the trial balances. This will ensure that the balances of those expenses account are transferred to the income summary account. These are general account ledgers that record transaction... Read more
Hourly employees usually accrue PTO with every hour worked, but companies often update their PTO balances with each payroll cycle. This disparity can create real headaches and hardship for employees who need to use their PTO for an emergency, but wh... Read more
An asset's salvage value subtracted from its basis (initial) cost determines the amount to be depreciated. Most businesses utilize the IRS's Accelerated Cost Recovery System (ACRS) or Modified Accelerated Cost Recovery System (MACRS) methods for thi... Read more
Sales taxes are closely related to use taxes, which apply to items purchased from outside their jurisdiction. An optimal sales tax is one that is applied to a broad base of goods and services with a low tax rate. Such a tax system can minimize the a... Read more
For example, it can calculate interest rates in situations where car dealers only provide monthly payment information and total price without including the actual rate on the car loan. To calculate the interest on investments instead, use the Inter... Read more
The quick ratio only includes highly-liquid assets or cash equivalents as current assets. Both types of liquidity ratios are calculated under a hypothetical scenario in which a company must pay off all existing current liabilities that have come due... Read more
For the PV formula in Excel, if the interest rate and payment amount are based on different periods, adjustments must be made. A popular change that’s needed to make the PV formula in Excel work is changing the annual interest rate to a period... Read more
For example, you could use this formula to calculate the present value of your future rent payments as specified in your lease. Below, we can see what the next five months would cost you, in terms of present value, assuming you kept your money in an... Read more
They can also be taxed at much higher rates than other dividends - sometimes as much as thirty-five percent. With that, different kinds of preferred dividends exist, with different tax consequences. True preferreds pay real dividends while trust pre... Read more
