Simple Explanation of Pro Forma Financial Statement Overview When a user looks at the pro forma documents, it is basically like looking into the future. The proforma is a projection where you make an assessment of future financial data and try to do your best to guess what will happen with your company in the future. Accordingly, a pro forma financial statement ..read more

Chart of Accounts Explained Definition In accounting, bookkeepers organize transactions by collecting them together in similar groups called accounts. These accounts, in turn, have names assigned to them, which can be unique to the business or can be common names. Since these names are often unique and are based on the needs of a particular business, it is helpful ..read more

Depreciation Expense Meaning and Calculation Methods Overview Any depreciation is expressed in monetary terms. In the process of production and work, there is gradual wear of fixed assets, therefore, they require replacement later. Since everything becomes obsolete over time and becomes unusable, depreciation expense is expressed in a very specific amount that is added to the product cost. There are different ..read more

What Is the Average Collection Period? Definition Nowadays, it is hard to imagine a business that does not sell on credit and, accordingly, deals with accounts receivable. Although there are many advantages to it, every company should closely watch this element of their business and use various measurements to keep it under control. The average collection period is typically considered as ..read more

A Simple Explanation of Notes to Financial Statement Overview The most important information about the financial condition, financial results, and changes in the financial condition of the company is contained in the financial statements. They include a minimum amount of information about some essential elements of the financial reports. However, behind each number in the financial statements, there is other information that is ..read more

Definition Bookkeeping records are maintained in every single business, from small to large. However, to implement it is only half a task, it is also important to correctly use and evaluate this financial data. There is a special indicator that the management should be aware of, which is a contribution margin. If you understand the ..read more

Simple Explanation of Notes Payable Overview Notes Payable is a liability on the Balance sheet. It is a loan with interest, where you borrow money and you are charged interest. The borrower promises to pay the money back on demand or at a fixed or determinable future time. The interest rate is determined based on the time frame for which ..read more

Sales Tax: Explanation and Calculation What is sales tax? Sales tax is a key factor in making a number of business decisions. In some situations, this may be the only tax that a business must pay on the territory of a particular American jurisdiction. Sales tax is levied on the sale of goods as well as certain types of services ..read more

What is Capitalization Rate? Let’s say you have a deposit in the bank, but you are not satisfied with the interest rates and want to earn more. You must understand: the higher the opportunity to earn, the higher the probability of losing all the money. If you understand the risks and have free funds, it may be worth learning ..read more

Overview Effective accounting service is the foundation of any business. Its functions include not only correct accounting, but also a timely response to any change in legislation, the ability to support the functioning of the company in an unstable economic situation. Initially, accounting in organizations was carried out independently, but gradually an increasing number of ..read more