Questions tagged [accounting]

for questions that relate to the laws, practices, and products of accounting. Please note that questions about accounting that are academic or have no bearing on personal finance are off-topic here.

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26 views

CPA or ACCA or others? [closed]

I am a Banking and Finance graduate, Compleated FRM (GARP) level 1 and ive just accepted an offer from EY as an intern auditor, what is the best next step for me? should I go for FRM level 2, CPA, ...
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2answers
116 views

Keeping track of birthday money with double-entry accounting

I'm trying to figure out how to keep track of my kids' birthday money in a double-entry accounting system (GnuCash). Currently I am keeping track of the amounts as sub-accounts of my checking account ...
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1answer
52 views

Compute Loan Balance for a specific month (period) on an amortized loan

I'm looking for is a method that will allow me to compute the Loan Balance value for a specific period (month) in the amortization table without having to compute all of the values before it. Let's ...
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1answer
117 views

How specifically are hidden financial assets (especially investment accounts) discovered during legal procedures?

I am interested in learning about financial asset discovery / forensic accounting. In particular, I'm curious as to how an investigator would locate a 'hidden' investment account. By this I mean an ...
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1answer
44 views

How can separate businesses account for shared expenses?

I have an LLC which holds two separate DBAs. Each business has its own checking account. Most expenses are distinct, but some, like office space and internet are shared expenses. How can I properly ...
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1answer
53 views

What is the correct accounting for purchases made on personal credit card?

I recently started an LLC. The LLC does not have a credit card of its own yet, and I've had to use my personal card to make purchases which I paid through personal funds. (Yes, I know I shouldn't do ...
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1answer
74 views

payments received in one year paid out the next year (US IRS tax question)

If you have an agreement that 70% of the profits from an activity will go to a contractor, and you receive the 100% of profits in year 1, but to protect against credit card fraud, you hold those ...
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1answer
92 views

How should I account for the benefit of depreciation?

I use GnuCash to manage my personal investments and have accounts that look a bit like this (sorry, I'm writing this on my mobile): Fixed Assets Property 1 Accumulated Depreciation Income Rent ...
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1answer
77 views

How do I properly account for interest charged on a loan in GnuCash?

I've just started accounting and entering initial balances for my personal finances with GNUcash and I'm curious about the proper way to account for interest charged on student loans and credit cards. ...
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1answer
150 views

Journal entries for payment of tuition fees [closed]

A student has total tuition fee of 8,000. The student paid 3,000 as a down payment and the journal entry is: Cash 3,000 AR 5,000 Tuition Fee 8,000 But what if the student will pay 3,500 for ...
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1answer
51 views

What's the double-entry bookkeeping method for tracking a Safe-to-Spend balance and amounts saved towards goals and expenses?

The bank Simple has three great features: Safe-to-Spend Goals Expenses The Safe-to-Spend balance is pretty simple: it's just the balance in your checking account minus the total amount set aside for ...
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4answers
182 views

Question about double-entry accounting [closed]

Here's a typical statement on the subject from this SO post: The logic, for those not familiar with accounting, is: money is not created nor destroyed, it is only transferred from account to ...
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1answer
153 views

UK: How do I make my separate company a subsidiary of another?

I have company A which is an investment company. I have company B which is an contracting company. I want to make company B a subsidiary of company A, I presume I need to fill out some type of form ...
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2answers
70 views

Why is CAPEX better than OPEX? [closed]

I have been tasked with managing our timesheet system at work. When filling out timesheets, people can select tasks which are classified as Capital Expenditure (CAPEX), such as writing code, or ...
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0answers
79 views

Why BAC company has “Gross Profit” reported every day?

I was looking into performance of BAC (Bank Of America Corp) and noticed very strange thing - it reports "Gross Profit" almost every day. See attached image and the link. Why is it so, is BAC a ...
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2answers
142 views

How do I get Gnucash to automatically assign expenses to accounts?

I'm using Gnucash. I'd like to create "virtual subaccounts" for my debit account to keep track of expenses. E.g: debit account --> groceries Regular "virtual payment" to groceries every month ...
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2answers
44 views

Negative line items under Revenue/Gains in a P&L / Income statement

I'm new to managing a P&L and currently have a document like this... Revenue/Gains/Top-Line --Sales on Product 1: 10,000 --Sales on Product 2: 20,000 --Returns on Investment 1: 10,000 --Returns ...
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24 views

What happens to net assets in case of increasing NPAs(Non-Performing assets)?

The bank's profit is measured as Return on Assets which is the ratio of Bank’s net profits and Net assets. In case of increasing NPAs, the bank's net profits will decrease, but what will happen to net ...
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4answers
90 views

GNUCash how to properly register a “bonus” on a transpit pass/gift card

What is the proper way to record "bonus" money on a card. specifically, when I charge my transit pass for 100, I actually get 150 on the transit pass account. how do I record the extra 50?
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1answer
29 views

Change in Prepaid Expense vs Change in Inventory [closed]

This is a basic accounting question. I realize that an increase in prepaid expense refers to the payment of a good or service that is not delivered in the current period. However, doesn't an increase ...
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1answer
74 views

Working Capital [closed]

To quote this website: https://www.oldschoolvalue.com/blog/valuation-methods/working-capital-free-cash-flow-fcf/ "The operating parts of the asset side of working capital include: Accounts ...
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2answers
102 views

Wrong Calculation on Income tax & P60

Please assist me with this Income tax question. For the financial year 18-19, a company paid a starting salary of £ 41,671.80 and gave a pay rise of 9.2 percent from 1st Oct 2018 which makes it 45,452....
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2answers
96 views

How does cash accounting work in an exchange?

Edit: I'm trying to create an order matching engine for options trading. I'd like to ask my question by creating a situation: Amy has a short position in a single (1) call option on AAPL. Let's ...
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2answers
126 views

Collecting payments and fees for a direct sales company

I'm a complete accounting novice, so please go easy on me if there is an obvious answer to this question. There is a direct sales company that provides a 50/50 split on all sales. Transactions are ...
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2answers
102 views

Difference between Common Shares and Retained Earnings

So I'm looking at my accounting textbook and it states that the total common shares account indicate 100% ownership in the company. Yet there are other shareholder's equity accounts such as Retained ...
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2answers
198 views

Are wages from a corporation always immediately tax deductible? [closed]

Suppose a corporation which constructs apartments and rents out those apartments expects to start earning money in its fifth year. Can it then just increase construction in that fifth year to create ...
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1answer
129 views

How am I taxed as director of limited company that is also employed by another company?

I am a UK resident working at a consulting firm earning 33k salary before tax. I have setup a limited company with a friend in which I am a director with 1/3 share in the company. We will soon be ...
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1answer
129 views

Depreciation question from Benjamin Graham book

I am reading The Interpretation of Financial Statements by Benjamin Graham. Ch. VI, Depreciation and Depletion contains the following wording: When property is retired its gross value is deducted ...
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1answer
295 views

How to enter Return of Capital in ledger-cli

Some background first: I'm using GnuCash for personal finances and am trying to get some reports from ledger-cli. The data is exported using piecash from GnuCash into a ledger file. When running ...
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1answer
231 views

Does ledger-cli support FIFO principle for selling stock lots?

I could not find the detailed information about lot tracking in ledger and would appreciate if someone took the time to make it explicit. If I have two purchase transactions for a fund, at 100 units ...
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3answers
179 views

Accountant won't send an invoice without a PO

I've outsourced accounting including AP, AR, Rev Rec, etc. I have an unbilled revenue problem, where my accountant won't send invoices unless we have a PO! This is a problem because even though I ...
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0answers
66 views

How to declare small business income before bank account is open

I have incorporated a company in December last year, and since then we started making money but had no bank account. Because of the company structure, one of the shareholders who owned more than 25% ...
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1answer
100 views

Should Balance Sheet short term notes payable include interest

Super simple example: You take a loan out in January of $50,000. $10,000 principal + $1,000 interest of the loan will be due back over the course of the 12 months ending the year If you were making ...
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1answer
208 views

How do I find a good accountant?

I'm wondering what types of resources are available for finding a good accountant, both in terms of assessing the quality of the services they provide as well as the cost of their services in ...
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0answers
87 views

How to categorize trust account payments?

I have two accounts - a trust account and an operating account. When I process credit card payments, they go through an operating account and then are transferred to the trust account. These payments ...
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69 views

Tracking GST/VAT from invoice to payment

Contrived example: Alice and Bob both work for Charlie, who runs a lawnmowing service. Charlie bills $100 plus 10% GST/VAT for the job. If Alice does the job, she gets $50 - if Bob does the job, he ...
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122 views

Accounting for monthly vested stock options as compenstation in GnuCash

I am working for a company that has recently gone public. Now I see a monthly accumulation of options vesting every month. I would like to account for these options as compensation in my accounts. ...
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1answer
272 views

Closing company, what do to with last amount of funds?

So the business is about to be shut down and there is a little bit of funds left over in the business bank account which I do not want/need. According to https://www.gov.uk/strike-off-your-company-...
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1answer
58 views

Which term describes fraudulently recording an asset more than once?

Imagine someone was working out how much my company was worth, and had tallied up the value of some machines that were in one of my factories, but then I move the machines to another factory (before ...
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5answers
256 views

Why isn't the retained earnings of a public company always distributed back to the shareholders?

Shareholders own a public company, so why shouldn't all of a company's income be distributed back to them? Why are dividends (if any) just a small fraction of a company's retained earnings?
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1answer
46 views

How to properly document owner investment into business

Say you have a new business and want to invest your personal income into the business to start. Say you initially just invest $25 to satisfy the bank's requirement for a new account, and say you ...
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1answer
126 views

Why only stockholder equity in the well-known accounting equation?

Assets = liabilities + stockholders' equity. Isn't this an oversimplification? The (traded) company may have raised money through stock, but maybe it also issued bonds, has profit this year, etc. ...
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1answer
77 views

What's the correct way to show a credit or discount on an invoice or order summary? [closed]

Is there a standardized way to express discounts or credits in an order summary? Example... Sub total: $20 Discount: -$10 Total: $10 I've seen discounts expressed as -$10, $-10, ($10), and +$...
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1answer
270 views

Accounting Question - Combining Vertical Analysis with Horizontal Analysis of financial statements?

Firstly I understand the concept of vertical analysis (representing line items as percentage of either total asset or revenue), and horizontal analysis (calculating the year-on-year changes or %...
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1answer
105 views

How do I calculate annual salary in case of salary split in a single month?

I am building a payroll system. My problem is if the employee's salary changes twice or thrice in a same month. If the: 1st period is x 2nd period is y then can I say annual income from 1st period ...
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3answers
157 views

Why Present Value and not Future Value?

This is a question in an online finance lesson, and I know what they want for the answer. But I'm not at all a novice at financial matters, so in my mind, I would do this differently. The question ...
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1answer
63 views

How should I charge a personal Bank Account for a Business transaction? (UK)

I am currently performing some ongoing work for a Sole Trader, where a monthly Direct Debit has been set up for the monthly fees. The Direct Debit was set up with their Business Account. Upon each ...
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2answers
142 views

How do I record a not-fully-paid expense?

I bought a pair of eyeglasses for $5 from a friend. I only paid to him $4 however as I didn't have enough cash then, so that means I owe him $1. Today I paid off the remaining $1. How should I record ...
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3answers
377 views

Why do the balance sheets of some large firms not balance?

I'm working my way through some accounting textbook and struggling to understand why some balance sheets on Yahoo Finance don't balance, as in: total assets - total liabilities != total shareholders ...
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365 views

Gnucash vs QuickBooks for both personal and business account

I'm considering keeping track of both personal and business accounts. I'm an old user of Gnu cash and I think I could manage with it. What would be the benefit to swapping to a new cloud accounting ...