Bookkeeping

In that case, a high debt-to-equity ratio might make it more difficult to find creditors or investors willing to provide funds for your company. Remember,your net income is made up of your total revenue minus your expenses. If you have high sales revenue but still have a low profit margin, it might be a high […]

Consider the following example where a company receives a $1,000 payment from a client for its services. The accountant would then increase the asset column by $1,000 and subtract $1,000 from accounts receivable. The equation remains in balance, as the equivalent increase and decrease affect one side—the asset side—of the accounting equation. But, the double-entry

We then assign the full standard amount of overhead to all units that were begun and completed in the period. As was the case with direct labor, any difference between the actual overhead cost and the amount charged to production in the period is either charged to the cost of goods sold or apportioned among

As well, a business can receive a capital contribution in other forms, such as non-cash assets like equipment and buildings. When these scenarios of capital contributions occur, they ultimately increase the equity that an owner has. Your distributions from the LLC are set every year by your percentage of ownership and the operating agreement. For

Increasing the cost of service, as long as it doesn’t alienate your customer base, will also help your bottom line and increase your gross profit. Let’s say you find a new supplier who will sell you snorkel sets for $4.50 instead of $5. Those same 10 snorkel sets now cost you $45, making your gross