How to Correct and Avoid Transposition Errors

The accounts and amounts are still correct, they’re just posted in the wrong direction. GAAP (Generally Accepted Accounting Principles) are the accounting rules you are obligated to follow when making financial statements. After you’ve found out the difference between debits and credits, the next step is to make a suspense account. The suspense account is […]

Current Assets: Definition, Lists, and Formula 2023

Investors and creditors use several different liquidity ratios to analyze the liquidity of the company before they invest in or lend to it. Investors want to know that their invest will continue to grow and the company will be able to pay returns in the future. Creditors, on the other hand, simply want to know that their […]

Cash Flow vs Profit: What’s the Difference?

You might help deter such attrition by implementing your new, higher prices only with new customers and keep your current rates for existing ones. This can allow you to maintain current revenue streams while generating higher cash flow from new projects. Cash flows are narrowly interconnected with the concepts of value, interest rate and liquidity. […]

What Are Generally Accepted Accounting Principles GAAP?

The International Financial Reporting Standards (IFRS) is the most common set of principles outside the United States. While non-GAAP reports may show more accurate figures for companies that experienced unusual one-time transactions, other businesses often list repeated earnings as one-time figures. Even though they appear transparent, non-GAAP figures can create confusion for investors and regulators. […]

Prepaid Insurance: Definition, How It Works, Benefits, and Example

This is because each month represents one-twelfth of the coverage period. When a business purchases and pays for insurance coverage, it is considered a prepaid expense. Since the business is paying in advance for the insurance coverage, the expense has not yet been incurred. Therefore, the prepaid expense is treated as an asset on the […]

6 Ways to Improve Your Company’s Working Capital

Implement the quick wins that generate significant benefits and are controlled by the company. Typical benefit improvement is 5 to15 percent of net working capital (NWC) and time to benefit of less than four months. LiquidityIQ is our proprietary working capital tool that utilizes a demonstrated methodology for the implementation of working capital improvement and performance. […]

Amortizing Bond Discount Using the Effective Interest Rate Method

A final point to consider relates to accounting for the interest costs on the bond. Recall that the bond indenture specifies how much interest the borrower will pay with each periodic payment based on the stated rate of interest. The periodic interest payments to the buyer (investor) will be the same over the course of […]

Services and Fees

The Uniform CPA Examination (Exam) protects the public interest by helping to ensure that only qualified individuals become licensed as U.S. Individuals seeking to qualify as CPAs are required to pass the Exam. Taking your exam on the last possible day does not guarantee that you will still receive your score by the target release […]

Cash Dividend: Definition, Example, Vs Stock Dividend

At Finance Strategists, we partner with financial experts to ensure the accuracy of our financial content. As this excerpt indicates, the management at General Electric Company has given considerable thought to the amount and timing of dividends. For more investment concepts, visit our Dividend Investing Ideas Center. Generate fixed income from corporates that prioritize environmental, […]