If you run your business on a cash basis, you only report income when you receive it. If you opt for "accrual," you report cash when you earn it, even if it takes several months to get your client to pay. Once businesses choose either cash or accrual basis, they generally use the ...
Explain how to compute accounting ratio liability divided assets. Explain how to determine assets, liabilities, and stockholder equity. Explain how the purchase of treasury stock affects the accounting equation. In accounting, what is the meaning of equity?
Businesses pay commissions to sales reps based on the amount of sales they generate. This is a common form of compensation intended to motivate high levels of production. The amounts you pay will vary greatly based on whether you use the net revenue or gross revenue approach to compute commiss...
Revenue is often used as one way of measuringthe size of a business, and investors tend to look at revenue growth as a reflection of a business’s growth rate. Along with profits, or net income, revenue is generally one of the two most important metrics that investors l...
Walk through an example. Using MACRS and assuming your exercise equipment has a useful life of five years, let's compute the depreciation expense: We are going to use MACRS at the 200 percent double-declining balance rate. For a 10 year period MACRS yearly depreciation expenses are: 20.00, ...
Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “MLPF&S" or “Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation (“BofA Corp."). MLPF&S is a registered br...
Net Cash Flow:Net cash flow is the economic benefit or cost, period by period, resulting from the investment. It is the difference between the net cash outflows and the net cash inflows in a given period.Answer and Explanation: Become a Study....
You would not want the system to compute taxes on a check date in the past since then you would likely already be delinquent on paying taxes on that old check date. So the "tax accruals" are being created in the correct month based on when check was dated in sy...
The company would make a journal entry to record the expenses as an accrual if it has incurred expenses but has not yet paid them. This would involve debiting the "expenses" account on the income statement and crediting the "accounts payable" account. ...
Income taxes complicate DSCR calculations becauseinterest paymentsare tax deductible andprincipalrepayments are not. A more accurate way to calculate total debt service would be to compute it like this: TDS=(Interest×(1−Tax Rate))+Principalwhere:TDS=Total debt service\begin{aligned} &\text{TDS...