Even if you’re not paying someone else to do payroll for you, it’s still considered a business expense. This is because your employees’ wages and your share of payroll taxes cut into your profit margin. And if business slows down, you may be faced with the difficult decision of delayi...
After I wrote an article aboutcapitalizing borrowing cost, I got a lot of e-mails asking me actuallyHOW to account for loansthat do not bear the interest rate reflecting market conditions. In other words, how to account for loans at below-market interest rate, or even interest-free loans. ...
The easiest way to divide payment responsibilities is to draw a line down the middle; each of you is responsible for half of the bill payments. HyperJar is a handy tool for this as you can create shared jars without needing to set up a formal joint bank account. You could create ...
I'd like to furnish you with additional information on how to link the check you've entered to a Bill. There are two options on how you can record vendor prepayments or deposits for prepaid parts or services: Use Accounts Payable to record prepayment Use an Asset account to track the ...
Using a spreadsheet to track and categorize expenses might be feasible if your business is very small. But as your business grows, manual methods are tedious and error-prone. That's why most companies use accounting software to categorize business expenses and create expense account reports, financ...
Then, after a month, the company makes an adjusting entry for the insurance used. The company makes adebitto the appropriate expense account and credits the prepaid expense account to reduce theassetvalue. The monthly adjustment for Company ABC would be $12,000 divided by 12 months, or $1,...
Prepaid costs In addition to the typical closing costs, some ongoing fees may need to be paid upfront, at least partially. These are known asprepaidsand can include a certain time frame’s worth of homeowners insurance premiums and property taxes, for example. For these monthly recurring expen...
expense on Company ABC’s income statement and a $500 credit to interest payable on itsbalance sheet. The interest expense, in this case, is an accrued expense and accrued interest. When it’s paid, Company ABC will credit its cash account for $500 and credit its interest payable accounts...
Prepaid expenses and advance payments: These refer to payments made in advance for goods or services that'll be consumed or delivered in the future. Examples include prepaid insurance, rent, or advance payments for future inventory purchases. Liabilities are on a separate part of the balance sheet...
In contrast, Verizon’s standard plan costs $75 monthly for one line and $130 monthly for two. Requirements To avail of this plan, the Verizon account holder must be 55 or more. As a senior, you must have one or two phones on the account based on the number of lines the person uses...