Category: Bookkeeping

Both liabilities and shareholders’ equity represent how the assets of a company are financed. If it’s financed through debt, it’ll show as a liability, but if it’s financed through issuing equity shares to investors, it’ll show in shareholders’ equity. When a company purchases goods or services from other companies on credit, a payable is recorded…

Active oversight is a solid internal auditing activity that should be used quite a bit. But, it can make sense to gain the support of the audit committee of the board of directors in advance. Otherwise, the examination might find an exception that was instigated by management to increase reported sales – and management will…

Though you can use checking accounts for check writing, you’ll probably use a debit or ATM card to access the money in your account more often. Checking accounts are used for day-to-day cash deposits and withdrawals. Banks and credit unions offer them, and you can access your money with a debit card, through online transfers…

Since everyone on the account has access to the funds, it’s important to set clear expectations from the start to avoid potential problems and overdrawing the account. Depending on the institution and state law, anyone on the account may be able to empty the joint account or even close the account altogether. You can do…

Other companies may also have a higher capital investment which means they have more cash outflow rather than cash inflow. The cash flow statement presents a good overview of the company’s spending because it captures all the cash that comes in and goes out. Profit is specifically used to measure a company’s financial success or…

Retained earnings are part of the profit that your business earns that is retained for future use. In publicly held companies, retained earnings reflects the profit a business has earned that has not been distributed to shareholders. Ways of describing negative retained earnings in the balance sheet are accumulated deficit, accumulated losses, or retained losses.…

We hope you can use what you learned from this article can help you on your journey to being smarter, happier, and richer. By knowing how dividends work, you can benefit from the wealth-creating capabilities of dividends. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier,…

The stock dividend has the advantage of rewarding shareholders without reducing the company’s cash balance. A stock dividend is a payment to shareholders that consists of additional shares of a company’s stock rather than cash. Dividend yields enable investors to quickly gauge how much they could earn in dividends by investing a certain amount of…

We hope you can use what you learned from this article can help you on your journey to being smarter, happier, and richer. By knowing how dividends work, you can benefit from the wealth-creating capabilities of dividends. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier,…

The stock dividend has the advantage of rewarding shareholders without reducing the company’s cash balance. A stock dividend is a payment to shareholders that consists of additional shares of a company’s stock rather than cash. Dividend yields enable investors to quickly gauge how much they could earn in dividends by investing a certain amount of…