Small Business Bookkeeping Transactions

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How to Account for Sales-Type Leases

A sales-type lease exists when (a) the lease does not meet the criteria to be classified as operating and (b) the lessor realizes both interest income and a profit [more…]

Best Bookkeeping Practices to Help You Manage Your Business

Regardless of the size of your business, efficient bookkeeping practices are essential to keep any business running smoothly. Here are some helpful hints to help you streamline your bookkeeping process [more…]

The Nuts and Bolts of Bookkeeping

Every bookkeeping system has a few consistent elements. Here is a list of what your business requires to ensure that it’s bookkeeping by the book: [more…]

Accounting for Debits and Credits in Double-Entry Bookkeeping

In double-entry bookkeeping, you enter all transactions in the books twice: once as a debit and once as a credit. This chart shows you how debits and credits affect your various business bookkeeping accounts [more…]

Current Ratio: A Valuable Tool for Bookkeepers

Bookkeepers use the current ratio to compare the current assets of a business to its current liabilities. This ratio provides a quick glimpse of your business’s ability to pay its bills. The formula for [more…]

Use Statistical Regression to Estimate Cost Behavior

Statistical regression allows you to apply basic statistical techniques to estimate cost behavior. Don’t panic! Excel (or a statistical analysis package) can quickly figure this information out for you [more…]

Ten Managerial Accounting Formulas

Managerial accountants compute and provide information within a company. Managerial accounting information is numeric, calculated using certain formulas. The following list summarizes some of the most [more…]

How to Track Inventory Flow

A simple formula explains how goods and their costs flow through a business. Retailers purchase products from other companies and then sell those products in stores, online, or through catalogs to their [more…]

How to Compute Direct Materials Put into Production

Although some purchased direct materials are put into production, some are stored for future use. Therefore, the amount of direct materials purchased is probably different from the amount of direct materials [more…]

How to Determine Cost of Goods Manufactured

Cost of goods manufactured is based on the amount of work-in-process completed. This work-in-process includes costs of direct materials put into production, plus direct labor and overhead. [more…]

How to Compute Cost of Goods Sold

After you know the cost of goods manufactured for a product, the next phase for the product is to store it as finished goods until your customers buy it — at which point you can figure out cost of goods [more…]

How Cost Drivers Affect Variable Costs

Variable costs change in response to certain stimuli, called cost drivers. Get it? Cost drivers drive up the cost. For example, a common cost driver is the number of units produced. Units produced is the [more…]

Fixed Costs in Managerial Accounting

Unlike total variable costs, total fixed costs remain the same regardless of changes in activity. For example, a factory may need to pay a fixed amount of property taxes and supervisor salaries regardless [more…]

Analyze Accounts to Separate Mixed Costs into Variable and Fixed Components

Factories and other companies typically must pay costs that include variable and fixed components, challenging accountants to figure out which camp these costs belong in. These [more…]

Scattergraph to Separate Mixed Costs into Variable and Fixed Components

A scattergraph helps you visualize the relationship between activity level and total cost. To scattergraph, just follow these steps (with explanations for creating the scattergraph in Microsoft Excel): [more…]

Use the High-Low Method to Separate Mixed Costs into Variable and Fixed Components

The high-low method enables you to estimate variable and fixed costs based on the highest and lowest levels of activity during the period. Just follow three steps: [more…]

Behind the Scenes of a Bookkeeping System

Bookkeeping refers to the process of accumulating, organizing, storing, protecting, and accessing the financial information base of an entity, which is needed for two broad purposes. The first is facilitating [more…]

Transactions in Bookkeeping and Those it affects

The recordkeeping function of accounting focuses on transactions, which are economic exchanges between a business or other entity and the parties with which the entity interacts and makes deals. A good [more…]

How to Pedal Through the Bookkeeping Cycle

There are the basic steps in virtually every bookkeeping system. The steps are done in a particular order, although the methods by which the steps are done vary from business to business. [more…]

Tax-Deductible Expenses for Micro-Entrepreneurs

For tax purposes, micro-entrepreneurs can deduct “ordinary and necessary” expenses incurred on behalf of their business. An ordinary expense is any expense common to a particular type of business. An ordinary [more…]

How to Handle GST Mistakes with Your Australian Taxes

So you’ve made a mistake on a Business Activity Statement (BAS) that you’ve already lodged with the tax office. Don’t despair! Correcting this kind of mistake is surprisingly easy. [more…]

Working with Australian Bank Rules

One of the big changes in accounting software in the last couple of years (whether cloud-based or desktop-based) has been the introduction of bank feeds and bank rules. These two features combined can [more…]

Dealing with Payroll Enquiries as a Bookkeeper in Australia

If you are the bookkeeper responsible for recording employee pays, then it’s inevitable that before long, you’re going to have to deal with an enquiry from an employee about their pay. Some enquiries may [more…]

Developing Your Bookkeeping Business

How do you picture your bookkeeping business? Are you content pursuing a small, home-based, part-time business, or do you want to grow your business to become a self-sustaining enterprise, independent [more…]

Bookkeeping Checklist

This step-by-step bookkeeping checklist should help you sleep easy at night knowing that you have done what you needed to do to get your books in tip-top shape. [more…]

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