If a business breaks the rules of accounting and ethics, it can be liable for legal sanctions against it. It can deliberately deceive its investors and lenders with false or misleading numbers in its financial report. That's where audits come in. Audits...
Senin, 26 Desember 2011
What is a sole proprietorship?
A sole proprietorship is the business or an individual who has decided not to carry his business as a separate legal entity, such as a corporation, partnership or limited liability company. This kind of business is not a separate entity. Any time a person...
What happened in corporate accounting scandals?
When a corporation deliberately conceals or skews information to appear healthy and successful to its shareholders, it has committed corporate or shareholder fraud. Corporate fraud may involve a few individuals or many, depending on the extent to which...
How is accounting used in business?
It might seem obvious, but in managing a business, it's important to understand how the business makes a profit. A company needs a good business model and a good profit model. A business sells products or services and earns a certain amount of margin...
Gains and Losses
It would probably be ideal if business and life were as simple as producing goods, selling them and recording the profits. But there are often circumstances that disrupt the cycle, and it's part of the accountants job to report these as well. Changes...
What is financial window dressing?
Financial managers can do certain things to increase or decrease net income that's recorded in the year. This is called profit smoothing, income smoothing or just plain old window dressing. This isn't the same as fraud, or cooking the books.Most profit...
What are auditors?
Accountants and auditors help to ensure that the Nation's firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They perform these vital functions by offering an increasingly wide array of business and...
Revenue and receivables
In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine...
Inventory and expenses
Inventory is usually the largest current asset of a business that sells products. If the inventory account is greater at the end of the period than at the start of the reporting period, the amount the business actually paid in cash for that inventory...
What is forensic accounting?
Forensic accounting is the practice of utilizing accounting, auditing, and investigative skills to assist in legal matters. It encompasses 2 main areas - litigation support, investigation, and dispute resolution. Litigation support represents the factual...
Minggu, 25 Desember 2011
43 What's the difference between private and public company reporting
A public corporation is a business whose securities are traded on the public stock exchanges, such as the New York Stock Exchange and Nasdaq. A private company is held solely by its owners and is not traded publicly. When the shareholders of a private...
Types of Costs
Direct costs are those costs that cann be directly attributed to a product or product line, or to one source of sales revenue, or one business unit or operation of the business. An example of a direct cost would be the cost of tires on a new automobile.Indirect...
What does an audit report contain?
Most audit reports on financial statements give the business a clean bill of health, or a clean opinion. At the other end of the spectrum, the auditor may state that the financial statements are misleading and should not be relied upon. This negative...
What happened at Enron?
Everyone knows at least a little about the Enron story and the devastation it created in the lives of is employees. It's a story that belongs in any discussion of ethical accounting processes and what happens when accounting standards and ethics are...
What are partnerships and limited liability companies?
Some business owners choose to create partnerships or limited liability companies instead of a corporation. A partnership can also be called a firm, and refers to an association of a group of individuals working together in a business or professional...
Depreciation
Depreciation is a term we hear about frequently, but don't really understand. It's an essential component of accounting however. Depreciation is an expense that's recorded at the same time and in the same period as other accounts. Long-term operating...
Parts of an Income Statement, part 1
The first and most important part of an income statement is the line reporting sales revenue. Businesses need to be consistent from year to year regarding when they record sales. For some business, the timing of recording sales revenue is a major problem,...
42 What is price/earnings ratio
The price/earning (P/E) ratio is another measurement that's of particular interest to investors in public businesses. The P/E ratio gives you an idea of how much you're paying in the current price for stock shares for each dollar of earning. Earnings...
What is the Sarbanes-Oxley Act?
The Sarbanes-Oxley Act of 2002 is a United States federal law passed in response to the recent major corporate and accounting scandals including those at Enron, Tyco International, and WorldCom (now MCI). These scandals resulted in a decline of public...
What are other ratios used in financial reporting
The dividend yield ratio tells investors how much cash income they're receiving on their stock investment in a business. This is calculated by dividing the annual cash dividend per share by the current market price of the stock. This can be compared...
Bookkeeping
So what goes on the accounting and bookkeeping departments? What do these people do on a daily basis? Well, one thing they do that's terribly important to everyone working there is Payroll. All the salaries and taxes earned and paid by every employee...
Profit and Loss
It might seem like a no-brainer to define just exactly what profit and loss are. But of course these have definitions like everything else. Profit can be called different things, for a start. It's sometimes called net income or net earnings. Businesses...
Bookkeeping Basics
Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare...
Personal Accounting
If you have a checking account, of course you balance it periodically to account for any differences between what's in your statement and what you wrote down for checks and deposits. Many people do it once a month when their statement is mailed to them,...
What is accounting fraud?
Accounting fraud is a deliberate and improper manipulation of the recording of sales revenue and/or expenses in order to make a company's profit performance appear better than it actually is. Some things that companies do that can constitute fraud are:--Not...
Depreciation reporting
In an accountant's reporting systems, depreciation of a business's fixed assets such as its buildings, equipment, computers, etc. is not recorded as a cash outlay. When an accountant measures profit on the accrual basis of accounting, he or she counts...
Sabtu, 24 Desember 2011
Investing and financing
Another portion of the statement of cash flows reports the investment that the company took during the reporting year. New investments are signs of growing or upgrading the production and distribution facilities and capacity of the business. Disposing...
What is acid test ratio and ROA ratio?
Investors calculate the acid test ratio, also known as the quick ratio or the pounce ratio. This ratio excludes inventory and prepaid expenses, which the current ratio includes, and it limits assets to cash and items that the business can quickly convert...
Senin, 19 Desember 2011
Read a Map
Knowing how to read a map isn't innate. The symbols, topography lines and direction helpers all require some understanding before you can read a map effectively. So, when Google Maps deserts you and you're left holding a real map, here is what to do....
Hitchhike
Whether Hitchhike getting a lift to the corner shop, covering the four corners of the world or simply just in case, there is a method Hitchhike to the madness of hitchhiking. The following instructions have been collected from the experiences of many...
Food for Vegetarians
Getting the correct Food for Vegetarians sources of nutrition and sustenance is essential to any diet. It can be a challenge to buy food for vegetarians if you are not familiar with this type of diet. You may end up making them sick due to unfamiliar...
Great Cooking
Great Cooking - Do people grimace at your food when it's your turn to cook? Do you feel hopeless in the kitchen? Follow these steps, and next time people may grin when it's your turn to great cooking! Here's Tips On How to Be a Great Cooking :Visit...
Overstimulation
Becoming overstimulation because you've spent too much time in a highly stimulating environment can leave you feeling irritable, with too much pent-up energy waiting to be released. This would be OK if you can take a run outside but getting overstimulation...
Lung Capacity
Many sports in today's action-packed world require you to use a vast amount of air from lung capacity to be successful. While there are ways to the size of your lungs, there are many ways to increase the amount of air taken in by your lung capacity,...
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