How to Invoice as a Freelancer: The Complete Guide

Don’t let them walk away after paying your invoice without an incentive to return. As your due date approaches, send friendly reminds and ask them if they have any questions or concerns about making the payment. In some cases, your invoice might have slipped through the cracks, so this friendly nudge is a good reminder […]

How the Burn Rate Is a Key Factor in a Company’s Sustainability

The above image is an e-Commerce financial model showing the company’s cash balance over time. A company’s net burn rate, however, is the total amount of money that a company loses each month. But for leadership at a startup, a high one isn’t necessarily the worst thing in the world. For instance, let’s say your […]

How to Calculate Straight Line Depreciation

If you are in the business of renting videocassettes, you can depreciate only those videocassettes bought for rental. If the videocassette has a useful life of 1 year or less, you can currently deduct the cost as a business expense. You stop depreciating property when you retire it from service, even if you have not […]

reclass Wiktionary, the free dictionary

Vanguard provides one example with their Admiral Shares, which are intended for high-net-worth individuals. If an investor falls below the minimum investment, their shares are automatically reclassified to the fund’s Investor Share class. It is important to note that reclassification is not the same as correction. When a transaction is recorded incorrectly, a correction is necessary […]

Source Documents Definition, Types, Importance, and Pros

Accountants use source documents to complete accounting journal entries about the transaction. Any information generated through source documents should be properly recorded in either the company’s journal, accounting software, or financial books. After the initial recording, all documents should be preserved and organized into a file and put into a system so they can be […]

Balance Sheet Definition & Examples Assets = Liabilities + Equity

Examples of revenue include the sales of merchandise, service fee revenue, subscription revenue, advertising revenue, interest revenue, etc. The revenue accounts are temporary accounts that facilitate the preparation of the income statement. However, when a corporation earns revenue, it has the effect of increasing Retained Earnings. We can see this with the end-of-the-year closing entries […]

How Management Assertions Influence Financial Audits

The auditor is required to collect whatever evidence is necessary to establish a connection between the values on the document and their real world counterparts. Below are some examples which provide an indication, but not an exhaustive list of how assertions can be tested at FAU and AA. Completeness – this means that transactions that should have […]

Full-Time Equivalent FTE & How to Calculate It

In general terms, full-time equivalent (or FTE) is a unit of measure that plays an important role in calculations used in businesses, project management, or federal programs for eligibility purposes. FTE, an abbreviation for “full time equivalent”, counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time […]

What Is the FIFO Method?

She noted that the differences come when you’re determining which goods you’re going to say you sold. Regular audits are key to verifying the accuracy of your inventory records and detecting any discrepancies. Schedule routine audits to reconcile physical inventory counts with recorded quantities in your system. Identify and address any inconsistencies promptly to prevent […]

Cost vs Expense: What’s the Difference?

Fixed expenses help businesses maintain a certain level of operations each month. This can include salaries, supplies, rent on office space or warehouse location, etc., and other necessary costs to keep everything running smoothly. Accrued expenses are transactions a company needs to pay, such as rent or mortgages, but has not yet paid. For example, […]