Category: Bookkeeping

Home valuations can help you make an educated guess about the amount of property taxes you’ll pay each year. And they can affect whether you’ll be able to get a mortgage on a home you’ve bid on. They may decide to go with the first appraisal if it’s not drastically off. Additional appraisals also require…

Companies should estimate a total amount of bad debt at the beginning of every year to help them budget for that year and account for non-collectible receivables. The accounts receivable account is credited, while the bad debt expense account is deducted. Whether bad debt expense is an operating expense is a contentious issue, and whether…

Since businesses add net income to retained earnings each accounting period, they directly impact shareholders’ equity. Dividends are a company’s distribution of revenue back to the shareholders. Companies may offer a dividend reinvestment program (DRIP) for shareholders to reinvest the dividends back into company stock, usually at a discount. Profit, on the other hand, is…

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The double-declining balance (DDB) method is an even more accelerated depreciation method. It doubles the (1/Useful Life) multiplier, making it essentially twice as fast as the declining balance method. It is important to consider depreciation when assessing the profitability of a business, as it is a non-cash expense that can have a significant effect on the…