This journal entry of recording the dividend declared will increase total liabilities by $100,000 while decreasing the total equity by the same amount of $100,000. Of course, the board of directors of the company usually needs to make the approval on the dividend payment before it can declare and make the dividend payment to the

By comparing book and bank balance and spotting discrepancies fast, companies can guarantee correct financial reporting. Skipping this could mean lost investment chances or payments made on wrong info. With online banking and automatic bill payments, keep track of pending transactions that haven’t been deducted yet. As a result, the interest earned would not be

One of the biggest expense categories for most small businesses is employee wages. In fact, salary expenses can take up to 50% of your total budget. Taxation expense includes any income tax, capital gains tax, and property tax due on the taxable assets and transactions of a business. Usually, the cost of hiring external professionals

These statements are then comprehensively combined by the parent company to final consolidated reports of the balance sheet, income statement, and cash flow statement. Because the parent company and its subsidiaries form one economic entity, investors, regulators, and customers find consolidated financial statements helpful in gauging the overall position of the entire entity. The consolidation

Margins are metrics that assess a company’s efficiency in converting sales to profits. Different types of margins, including operating margin and net profit margin, focus on separate stages and aspects of the business. Gross margin gives insight into a company’s ability to efficiently control its production costs, which should help the company to produce higher

The School Tax Relief (STAR) exemption applies to owners of residential property who use their properties as their primary residences. STAR offers an exemption for a portion of a home’s value from school taxes. Several tax credits are available for expenses such as child and dependent care costs. The latest IRS and Census data show

The accrual adjustment will debit the current asset account Accrued Receivables and will credit the income statement account Accrued Electricity Revenues. At the end of the month, when the company receives payment from its customers, receivables go down, while the cash account increases. If companies incurred expenses (i.e., received goods/services) but didn’t pay for them

Content Quick Tips: Avoid These Mistakes When Calculating Contribution Percentage or Margin Point of sale Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials Contribution Margin Ratio Formula Why contribution margin ratio is important How Do You Calculate Contribution Margin Ratio? The contribution margin represents the portion of a product’s sales

In the end, management should know whether each product’s selling price is adequate to cover the product’s manufacturing costs, nonmanufacturing costs, and required profit. Manufacturing costs initially form part of product inventory and are expensed out as cost of goods sold only when the inventory is sold out. Non-manufacturing costs, on the other hand, never

The database is updated daily, so anyone can easily find a relevant essay example. Managerial accounting aims to assist the management of an organization to effectively perform its functions such as planning, organizing, directing, and controlling. They help the management to carry out these tasks in an efficient way by performing their roles. Find out