Under the accrual method of accounting, an expense is a cost that is reported on the income statement for the period in which: The cost best matches the related revenues The cost is used up or expires There is uncertainty or difficulty in measuring the future benefit of the cost Examples of...
Depreciation expense is the appropriate portion of a company’s fixed asset’s cost that is being used up during the accounting period shown in the heading of the company’s income statement. Example of Depreciation Expense To illustrate depreciation expense, assume that a company had paid $480,...
reconciliation, and workflow creation and management. They can also answer specific questions related to your books and your business. Some basic bookkeeping services may not be included and will be determined by your Live Bookkeeper. The Live Bookkeeper will provide help based on the information yo...
For businesses that use accrual accounting methods, a reconciliation to cash basis accounting is made on the Statement of Cash Flows (SoCF). While this statement is mostly an amalgamation of income statement activity and changes in the balance sheet, some investors see the SoCF as an important...
So, what is a gross-up provision? Simply stated, the concept of “gross up provision” stipulates that if a building has significantvacancy, the landlord can estimate what the variable operating expense would have been had the building been fully occupied, and charge the tenants their pro-rata...
Why does your company need a payment reconciliation process? As time-consuming as it is, keeping good, accurate records is the cornerstone of running a business efficiently. It’s all too easy to make an error, lose a receipt or account for a payment that isn’t a business expense. And ...
Sometimes, especially with smaller amounts, you may have to write the amount off as a loss or bad debt expense. This is because the cost of pursuing the case legally or otherwise (using your resources) may far surpass the returns of doing so. ...
What is a Prepaid Expense? A prepaid expense refers to future expenses that are paid in advance. The prepaid expense begins as an asset on the balance sheet. Then, over time, as the asset provides its value, it gets recorded as an expense (on the income statement) during the same acco...
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as in double-entry bookkeeping, as either income or an expense. Single-entry bookkeeping is less complicated than double-entry and may be adequate for smaller businesses. Companies with single-entry bookkeeping systems can perform a form of reconciliation by comparing invoices, receipts, and other...