To verify this assertion, auditors need to analyze if the reported values in the financial statements of the company have taken place. This assertion indicates that transactions or products have been categorized and documented in the appropriate accounts or classifications, respectively. For instance, salaries paid to office personnel are classed and reported as administrative expenditures,…

No matter which calculation method is used, it must be updated in each successive month to incorporate any changes in the underlying receivable information. The estimated percentages are then multiplied by the total amount of receivables in that date range and added together to determine the amount of bad debt expense. The table below…

Therefore, the company’s financials would show losses until the cash payment is received. A lender, for example, might not consider the company creditworthy because of its expenses and lack of revenue. By using accruals, a business can see beyond its cash flow and be able to plan better. It’s normal for a company to record…

You then make a single monthly payment to an accredited credit counseling or debt relief agency, which distributes the money to your creditors to pay down each of your enrolled debts on a set schedule. In accounting, cash over and short journal entry is usually made when the company replenishes its petty cash fund. This…

Construction companies should use a percentage-of-completion method that recognizes both revenue and expenses as they are accumulated over time. It aligns with the project completion ratio and most lenders or guarantors require this. This software is best for those who manage construction projects on real estate that they own or lease. Sage 300 is as…