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When Do Annual Reports Come Out? And What is the Distribution Requirement?

Companies conduct business operations to generate revenues and profits. However, they need finance to do so. Usually, this finance comes from equity holders and creditors. These parties provide funds that companies can use to perform various business activities. In exchange, companies repay those parties in several ways. These parties fall under the definition of a […]

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Is Depreciation Part of Operating Expenses? (Yes, But Not All the Cases)

Fixed Assets

IAS 16 Property, Plant, and Equipment cover the accounting treatment for fixed assets. These assets include resources used by companies in the long term. Usually, companies acquire these assets to help support their operations. This process requires substantial capital investments in various resources. For the company, the process results in a cost or expense. However,

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What are Other Operating Expenses? (Explained)

Financial Accounting

The income statement is a financial statement that reports a company’s performance for a period. It is one of the most favorite reports for investors. Usually, it presents the profits or losses a company makes during a period. The income statement also reports on activity through income and expenses. These items are crucial in helping

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Are Salaries Operating Expenses or Cost Services?

Payroll Account

Companies employ workers who perform various duties. These duties contribute to operations that can help improve business. Consequently, companies increase their revenues while also making profits during the process. In exchange, they pay their workers compensation. This compensation may include several elements. Nonetheless, it is a necessary expense to help increase revenues and profits. Employees

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What Percentage of Operating Expenses Should Be Payroll?

Payroll Account

Human resources are one of the most crucial assets for most companies. Although some companies have reduced the need to rely on them, these resources are still vital to survival. Usually, it includes the employees that work for a company. Although companies cannot recognize these employees as an asset in accounting, they provide significant value.

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What is the Difference Between Current Assets and Current Liabilities?

Current Assets

The balance sheet is a financial statement that reports various account balances. Companies may combine several items under a single name or report them separately. Nonetheless, they accumulate those accounts to offer a financial picture of operations. The balance sheet is the only financial statement that presents those balances. Similarly, it does not report the

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Is Bad Debt Expense Part of Operating Expenses or Cost of Goods Sold?

Financial Accounting

Companies use various techniques to increase their revenues. One of the most reliable ways to achieve it includes offering credit purchases. Usually, companies prefer to receive cash for their sales. This process reduces the time for companies to complete their operational cycle. However, some customers may not have money readily available. These customers may request

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Are Mortgage Current Liabilities or Non-Current Liabilities?

Financial Accounting

Many companies have gone digital and moved their operations online. However, most companies still need physical space to allow interactions between workers. On top of that, companies need to have a location for other needs. Companies use properties and buildings to establish this location. This space may come under a lease or rental agreement. Sometimes,

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Are Retained Earnings Current Liabilities Or Assets?

Financial Accounting

Most companies exist to profit from their operations. These profits come when the total income for a company exceeds its expenses for a period. Usually, the higher the income and lower the expenses are, the more earnings it will generate. Companies use these profits to fund their operations and pay their equity holders for their

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What are Other Current Liabilities? How Do You Account For It?

Financial Accounting

The balance sheet includes three critical components. These are assets, equity, and liabilities. In accounting, each of these represents a different category of balances. Companies must identify any accounts that meet the definition for these components. Once they do so, they must classify those accounts under the relevant heading. In the end, the total balance

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