Any company that is not conservative in the reporting of its revenues and expenses is engaging in “accounting noise.”
Proper financial statements should be able to provide the following information about the business:
Feedback. The information from the Financial Statements should be able to explain past events, confirm or adjust expectations / predictions, show the results of […]
A company who has had a poor performance resorts to “accounting noise” to make it look better than it really is.
One way is to fudge income figures (e.g., declaring prospective income that has not yet been realized).
Another way is to fudge expense figures. In effect, postponing expenses incurred during […]
The earnings of a business (corporation and small business) or of an individual or household (personal finance) are the difference between the revenues and expenses during an accounting period.
The difference between cash receipts and cash disbursements cannot be considered as earnings.
The revenues should include not only the cash received during the period, but also the […]
Most small businesses, usually because there is no accountant and the proprietor himself does the accounting, stop at the Income Statement. Because most or all of the transactions are in Cash, the Income Statement is also made to serve the purposes of a Cash Flow Statement. However, you cannot really tell the true […]
For a small business where products are not too numerous, it is easy to determine the Cost of Goods Sold.
For a small business where the volume is great, determining the Cost of Goods Sold is difficult. A useful accounting procedure is, as follows:
You have to define the period (i.e., Income Statement for the month, […]
The Balance Sheet is a snapshot of how your business stands at a point in time. The Income Statement shows how / why / by how much your business is growing.
REVENUES. If you have somebody selling for your business, you have to take out from the Sales figure his compensation. Then, […]
Our apprentice-like challenge is into its 5th week and the b5media ACES have completed their response to the fifth, latest challenge. The advice should serve any entrepreneur thinking of upgrading a Home Business to a Self-Owned Outside Business. Let us know what you think.
Kay’s business is doing great. However, her family is […]
Many wage earners have a very difficult time controlling Expenses which actually grow more rapidly than the increases their employers are willing to give. Thus, very little cash surplus (or worse, no cash surplus at all) is generated.
The best way to control Expenses and actually SAVE some amount is to spend money on an […]
Consider the case of an individual or household with no financial or physical Earning Assets, whose only Earning Assets are Manhours, where the Salaries or Professional Fees have related Direct Costs which do not leave sufficient Cash to meet Expenses:
In the previous post, we started by first looking at the possibilities of maximizing Manhours or […]
Considering the case of an individual or household with no financial or physical Earning Assets, whose only Earning Assets are Manhours, where the Salaries or Professional Fees have related Direct Costs which do not leave sufficient Cash to meet Expenses:
What are the possible options for solving the financial problem?
The options start with your Manhours, your […]
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