Accounting Category: How to's

Accounting Articles

January 3, 2014

Financial management is a risky business - predictions of future performance are prone to the effects of an ever-changing economic environment. Discounting predicted cash flows is one method a financial manager can use to account for the risks associated with forecasting performance.

September 26, 2013

Most businesses have bank accounts. A number of situations can take place in relation to such accounts. For example, a company may have written checks in excess of a bank balance. Or a company may have a zero balance account and any checks that clear the company’s bank account are financed by a revolving line of credit. How should these transactions be recorded on the balance sheet? What about the statement of cash flows? In this article you will find answers to these questions.

March 30, 2013

Quite often rent agreements classified as operating leases include uneven rent payment terms (e.g., escalating rent payments or rent holidays). For example, a 5-year building rent agreement may specify that rents will go up 5% every year after the first year. Some companies assume that the rent expense should be recognized based on the rent payments. However, under US GAAP this most probably won’t be true. In this article, we review accounting for lease agreements with uneven rent payments.

February 6, 2013

Leasehold improvements represent additions to a lease property. Accounting for such improvements normally does not present a significant issue except for their amortization. This article covers a common issue which relates to the amortization of leasehold improvements.

January 15, 2013

Companies may build (construct) some of their fixed assets because such assets may not be available for purchase from other companies or because it is cheaper to do so. An important aspect of constructing own assets from the accounting standpoint is the cost accumulation. In this article we will discuss which expenditures should be included in the cost of self-constructed assets (interest capitalization is not covered in this article).

December 5, 2012

Income taxes are usually a significant expense of a company. For example, many corporations pay income taxes in 30-40% range. In this article, we will discuss a basic concept that applies to the payment of federal, state, or local income taxes. We will limit our discussion to taxes paid by corporations. We will not cover, in this article, temporary differences and the allocation of income taxes between financial statement periods. These topics will be discussed in later articles.

October 24, 2012

Consignment inventory is one of the marketing methods used to attract customers. One variation of consignment is when a seller delivers goods to a customer (buyer) but retains the title to the goods until the buyer uses the goods. In this article we explore accounting for this type of consignment arrangement.

September 11, 2012

Record keeping is essential for operating a business. Record keeping can be manual or computer-based. Both ways have their advantages and disadvantages. In either case, cost of record keeping is usually high.

July 21, 2012

Should the useful life of a newly acquired fixed asset be the same as its physical life? This and other questions related to fixed asset useful lives are answered in this article.

April 8, 2012

Learn about accounting for advances to employees and officers with real-life examples and journal entries.

<< Previous    1    2    3    4    5    6    7    Next >>   

Accounting Categories
Accounting categories represent a collection of accounting guides and answers related to one accounting area.