The accounting equation will always balance because the dual aspect of accounting for income and expenses will result in equal increases or decreases to assets or liabilities. The purpose of this article is to consider the fundamentals of the accounting equation and to demonstrate how it works when applied to various transactions. If your business…
A small business can likely do all its own bookkeeping using accounting software. Many of the operations are automated in the software, making it easy to get accurate debits and credits entered. FinancePal is best for small businesses that need bookkeeping assistance, including catch-up bookkeeping, entity formation and tax filing. They’ll provide guidance, answer your…
If you are good at math and have an eye for detail, bookkeeping is not too hard to learn. These are key skills for bookkeepers, so if you’re not a fan of math at all, it may not be the best career path. Accountants are more specialized, so not every company has an in-house accountant.…
The conventional approach to retirement planning is fundamentally flawed. It can lead you to underspend and be miserable or overspend and run out of money. This book teaches you how retirement planning really works before it’s too late. Many of the features in my compound interest calculator have come as a result of user feedback,…
For sole proprietorships and partnerships that keep formal financial records, the owner’s drawing appears as a temporary account under owner’s equity. Each owner of the business typically has an equity account, or capital account, in the company’s books that keeps track of his stake in the company. It’s made up of the money he’s invested,…
For example, when Hertz announced their bankruptcy in 2020, their lenders are generally entitled to collect on their debts from all the assets held by Hertz. One of the ways that certain companies can do so is through project financing. This form of funding allows businesses that https://personal-accounting.org/project-finance-vs-corporate-finance/ may not have a strong financial history…
That price is paid by a retailer, but to the retailer, that price is actually a cost—it’s the cost of acquiring inventory for the retail store. After acquiring the t-shirt, the retailer will put it out on the sales floor. A customer who wants to buy it will pay the price charged by the retailer,…
It offers a wide and versatile set of models for financial data, including energy transition and ESG risks. While the business valuation software mentioned above mainly focuses on financial data, there are many other factors that impact a business’s valuation and potential for growth. These are important factors to consider when forecasting future value. Equidam…
This includes things like routine cleaning and maintenance expenses and repairs that keep the property in usable condition. When you buy property, many fees get lumped into the purchase price. You can expense some of these costs in the year you buy the property, while others have to be included in the value of property…
Fundamental analysis, on the other hand, relies not on sentiment measures (like technical analysis) but on financial statement analysis, often in the form of ratio analysis. Creditors and company managers also use ratio analysis as a form of trend analysis. Horizontal analysis involves the calculation of percentage changes from one or more years over the…
