When Do Annual Reports Come Out? What are Annual Reports? Annual reports are comprehensive documents that provide an overview of a company’s financial performance and operations over a year. This type of report became a regular part of corporate financial reporting after the stock market crash of 1929, when legislation was enacted to ensure its … Read more
Liability vs Equity Liabilities are legally binding obligations to another entity, which can be settled through cash or asset transfers. Examples of liabilities include accounts payable, accrued expenses, wages payable, and taxes payable. Liabilities are often incurred to fund ongoing business activities. In some cases, liabilities may be written off through bankruptcy proceedings. Liabilities can … Read more
How to Pay Hourly Employees Semi-monthly Payroll processes determine how employees receive their wages, from the frequency of payment to the chosen payment method. When it comes to paying hourly employees, a semi-monthly payroll is often the most common choice. This type of payroll is seen as an efficient and cost-effective way to pay hourly … Read more
Is Prepaid Rent a Current Asset? Prepaid rent is a payment that is made in advance for goods or services that have not yet been received. It is a common practice to pay rent in advance, but it is important to understand how prepaid rent is treated on the balance sheet. This article will explore … Read more
Are Retained Earnings Current Liabilities Or Assets? Retained earnings are a major component of a company’s financial statements and one of the most important components of shareholders’ equity. It is important to understand how retained earnings are classified to correctly analyze a company’s financial position. Key Takeaways Retained earnings are not considered current liabilities but … Read more
Examples of Accounting Estimates Accounting Estimates Accounting estimates are an approximation of business transactions, used in accrual basis accounting, that are based on historical evidence and the accountant’s judgment. These estimates are used to make financial statements more complete by anticipating future events that are considered probable. Changes in estimates affect current and future periods, … Read more
Direct Labor Cost Direct labor cost refers to the wages, payroll taxes, insurance, and other benefits associated with the labor that is used in the production of goods. This cost can be tracked in a job costing environment, where the time spent on various jobs is recorded. In service industries, employees track their hours by … Read more
Why is an Account Payable not Classified as a Non-current Liability? Non-current liability Non-current liabilities are financial obligations or debts that a company expects to pay in more than one year. They are also referred to as long-term liabilities. Non-current liabilities can be found on the company’s balance sheet, and typically consist of long-term leases, … Read more
Accounts Payable Review Maintaining accurate records of accounts payable is critical for any business. Accounts payable review can help to identify errors and discrepancies and ensure that all invoices are paid promptly. The review process typically begins with a reconciliation of the accounts payable ledger. This ensures that all invoices have been recorded accurately and … Read more
Return on Net Operating Assets Operating assets are all the physical and financial resources that a business owns or has access to, which help it generate income. Operating assets can include both fixed and current assets. Fixed assets, such as buildings and equipment, are intended for long-term productivity, whereas current assets are more liquid and … Read more