Corporate finance is the body of knowledge that dictates the decisions a company makes about its finances.
Using a mortgage loan to buy a house has historically been a wise decision. Unlike other types of debt such as credit card debt, a mortgage is a ‘good’ use of debt since you are buying something that has the potential to appreciate over time (unlike clothing and cars which usually lose value). In addition, you … Continue reading Home Buying Mortgage Basics
The last two steps in the accounting process are preparing a trial balance and then preparing the balance sheet and income statement. This information is provided in order to communicate the financial position of the entity to interested parties. TRIAL BALANCE A trial balance is a list and total of all the debit and credit … Continue reading Accounting Trial Balance Example and Financial Statement Preparation
Learn about the concept of GAAP, or Generally Accepted Accounting Principles.
We touched briefly on liability in a previous article, and we mentioned it again during our asset discussion. But what and how do we classify something as a liability? A liability is something for which we are responsible. Liabilities are not just loans; they can be homework assignments, study material, or our little brother on Saturday night. In … Continue reading Basic Accounting: What is a Liability?
The accounts payable function of accounting is an area that requires close monitoring and accurate record keeping, unless you ‘d like to pay for things you don’t receive. Everything that you purchase in the course of operating your business is termed an “account payable”. How you choose to pay for that merchandise, may vary. Some small items … Continue reading Understanding Accounting: Accounts Payable Function
No, it is not an overdraft notice from the bank. Your statement of cash flows is a business tool used by many smart businesses to determine their flexibility when preparing budgets, making decisions about asset purchases, and to monitor their level of profitability in relation to cash availability. What is a statement of cash flows, and … Continue reading Your Accounting Statement of Cash Flows
Cost accounting is a very obscure area of accounting expertise, and most accountants that work with cost accounting are hired by corporate America to perform private cost analysis and evaluation on the products manufactured by that particular company. Cost accounting can be helpful, however if you’re going to have a need to establish prices for … Continue reading Fundamentals of Cost Accounting
Owners equity is the dessert of the accounting field. This is the one topic everybody likes to discuss, and that most individuals who own and operate a business really like to watch as it increases. What is the correct definition of owner’s equity, and why is it one of the most important pieces of the accounting … Continue reading Basic Accounting: What is Owner’s Equity?
The Balance sheet is one of the more widely recognized accounting tools, and is used extensively in the banking and financial world to determine a businesses overall health. What is the balance sheet, and why is it so important in determining the overall health of a business? Let’s answer this two part question, one piece at … Continue reading Your Accounting Balance Sheet