Definition Times interest earned ratio allows looking at how much money the company is bringing in and evaluate if it can take care of its immediate financial burdens. One of these burdens is the interest companies have to pay to
Payroll Salaries are the main motivating factor in one’s work. Besides the actual amount, a no less important factor is the correctness of its calculation and timely payment. For an employer, wages often fall under the main expenses that need
What is the source of the assets a company owns? The organization cannot function without a constant flow of funds. The company takes money from various sources: loans, equity capital, profits, and so on. All of them must be recorded
Overview The Balance sheet is the type of reporting that almost all business entities are required to prepare. This document presents the most complete overview of all the processes that take place within the company. A Balance sheet is a
Overview Financial data is a valuable resource for management, investment, and other decisions. To make it more useful, bookkeepers create temporary accounts to track revenues and expenses. Periodically, they close (zero out) these accounts to start from a new and
Dividends Dividends are a portion of the profits that a company distributes to shareholders in the form of dividends. In order to pay dividends, the company must receive a net profit, which it distributes to its shareholders. Whether it will
Why do you need accounting? The law requires all companies to maintain bookkeeping records that contain all of their financial reports. In addition, proper accounting also helps you measure how your business is doing. Maintaining accurate books, though, takes time
Definition A Trial Balance is created by a company because we want to summarize all the business activities that we have recorded throughout the months in the form of journal entries. These journal entries will result in a balance for
Overview Unearned or prepaid revenue is a business’s liability even though it has the word revenue in it because you receive payments in advance from a customer for a service that has not yet been started or completed or products
Overview Before we explain what a flexible budget is we need to step back and have a look at what a static or fixed budget is. The budget made during the planning for the coming calendar year or any other
