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69 votes
Accepted

What does "gold reserves" on a gold mining company's balance sheet mean?

For gold mining companies, the amount of gold that the company has access to but has not yet been mined is accounted for in "reserves". The company can claim a percentage of those reserves as assets, ...
D Stanley's user avatar
  • 136k
63 votes
Accepted

What are the advantages of doing accounting on your personal finances?

In my opinion, every person, regardless of his or her situation, should be keeping track of their personal finances. In addition, I believe that everyone, regardless of their situation, should have ...
Ben Miller's user avatar
  • 116k
42 votes

How to teach personal accounting to an 8-year-old

If I were you I would simply use a check register, cash, and jars. Check register sheets can be printed online and increased to an appropriate size. I really like Dave Ramsey's teaching on this. ...
Pete B.'s user avatar
  • 76.7k
36 votes

How do you calculate the depreciation on a car?

Car is worth what people are willing to pay for it. While you're calculating depreciation for accounting purposes, that's not how real world supply and demand market price setting works. The car may ...
littleadv's user avatar
  • 176k
30 votes

Are stocks and bonds actually liquid?

The second quote sounds like complete nonsense to me. There is no "high cost to their owner" from converting the stocks into cash. The high cost comes from the stock losing value. That an asset can ...
David Schwartz's user avatar
27 votes

How to teach personal accounting to an 8-year-old

I've recently switched over to an allowance system that is attempting to teach my son the value of money, and more specifically, saving money to earn more money. It's a very exaggerated interest-based ...
Dan's user avatar
  • 279
25 votes

How to teach personal accounting to an 8-year-old

Since she essentially only has a cash register, a simple cash journal should do the job. Have her do weekly sums and compare with the contents of the piggy-bank. If she forget to record some ...
Daniel's user avatar
  • 5,316
21 votes

I can't understand what equity is

Consider something tangible: a car. You buy it for $20,000 and borrow $10,000 of that. At some point in the future, the car is worth $15,000 and you still owe $9,000. Your equity is the difference - $...
Kate Gregory's user avatar
  • 13.2k
19 votes

How do you calculate the depreciation on a car?

The way I quantify depreciation is to look at how age affects current prices. If one examines online car marketplaces, such as ebay, craigslist and more UK specific such as autotrader one can see how ...
User65535's user avatar
  • 440
16 votes

I can't understand what equity is

Equity is the amount of value that's yours. If you get $50000 by borrowing $50000 from the bank, you didn't really get $50000. You have $50000 cash, but it's not really yours. If you earned $50000, ...
Quitting Due To Antisemitism's user avatar
14 votes
Accepted

Are stocks and bonds actually liquid?

From your second Investopedia link: For a consumer, a lack of liquidity can mean borrowing at a high rate of interest, selling a possession at a probable loss, or failing to pay the bills on time. ...
Bob Baerker's user avatar
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14 votes
Accepted

Double entry bookkeeping - Record incoming money which I would hold temporarily as a custodian

The correct accounting, assuming that if 500 comes in, you're sending the whole amount to your dad would be Debit Asset/Cash/MyBankAccount for 500 Credit Liability/Payable/Dad for 500 Then when you ...
Levi Ramsey's user avatar
13 votes
Accepted

How to account for months lapse in tracking finances

I'd say you have a couple options that differ by the amount of time required. Option 1: Export your checking/credit card ledgers from your banks for the unaccounted for periods you mention then ...
Andy's user avatar
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13 votes
Accepted

In a Budget is Saving Considered an Expense?

I have a saving section but I am not sure if it is considered an expense? and how do you account for it at the bottom of the budget Budgeting approaches can vary. In my opinion, a zero-based budget ...
Hart CO's user avatar
  • 70.5k
13 votes

What does the term Other Revenue mean?

It means revenue from other business activities that aren't substantial enough to warrant their own line items. Target's latest 10-K provides some detail about what is included: Other – Includes ...
Hart CO's user avatar
  • 70.5k
11 votes

What are the advantages of doing accounting on your personal finances?

Everyone should keep track of what they spend. When you see how much you are spending on each category of expense, you can make good decisions about how much your life is improved by something vs. how ...
NL - Apologize to Monica's user avatar
11 votes
Accepted

Presenting negative numbers using parentheses: where does this practice come from?

I'd love to see if someone can find a convincing origin story for the practice, but I believe it became adopted simply because parenthesis stand out more than a negative sign. Think of a hand-written ...
Hart CO's user avatar
  • 70.5k
11 votes
Accepted

What does the term Other Revenue mean?

Are you asking "What specifically does Target mean by Other Revenue" or are you asking "What might a company like Target mean by Other Revenue"? Given that Other Revenue appears ...
Justin Cave's user avatar
  • 27.3k
10 votes

Does Apple have $0 of treasury stock?

Treasury stock is not really represented in the Balance Sheet as a "Treasury stock" line item in the assets. Some companies will break out Treasury Shares as a line item in the "Shareholders Equity" ...
quid's user avatar
  • 49k
10 votes
Accepted

Claiming income/deductions on an illegal apartment

The IRS demands and expects to be paid tax on all taxable activity, including illegal activity. If they expect drug dealers, hit men, and smugglers to pay tax, they expect you to pay tax on your ...
farnsy's user avatar
  • 15.1k
10 votes

Double entry bookkeeping - Record incoming money which I would hold temporarily as a custodian

If these are your personal accounts, and you consider your dad a separate financial entity - such that your owings to him are a Liability - then the cashflow isn't Income for you at all. It's ...
Andrzej Doyle's user avatar
10 votes

I can't understand what equity is

Kate explains the first question well, but I think there's something to add for the second: People buy stocks not just for the current equity value (assets - liabilities), but for a share of future ...
D Stanley's user avatar
  • 136k
9 votes

Are stocks and bonds actually liquid?

Let me address why stocks can have wildly differing levels of liquidity. It all comes down to one thing: for you to sell your shares, someone has to be willing to buy them. For a typical investor? ...
Kevin's user avatar
  • 2,640
8 votes

What tax year does my income get assigned to if my client sends the payment in December but I receive it in January?

If you run your business on a cash basis: January If you run your business on an accrual basis: December Confused? see your CPA
michael's user avatar
  • 2,070
8 votes

Is the blockchain similar to double-entry book-keeping?

Does this mean that double entry book-keeping is practically a blockchain, with each block being a transaction? Not exactly. In double entry book-keeping, every institution keep its own accounts that ...
Dheer's user avatar
  • 57.1k
8 votes

Am I being fair to my partner, or will she lose money?

Companies pay for things their staff are allowed to use, quite regularly. For example, providing a laptop or tablet to a staff member who can also use it to watch Netflix or play games, ie personal ...
Kate Gregory's user avatar
  • 13.2k
8 votes

Question about double-entry accounting

I wonder if you're confusing "account" as meaning a bank account. An account, in accounting terms, is merely a ledger or list of transactions. Say that you receive some cash. Where did that cash come ...
Luck's user avatar
  • 243
8 votes
Accepted

Is a checking account in the negative still an asset?

The overdrawn checking account would still be an asset in the context of a balance sheet or any type of aggregation. It would just have a negative balance. Same goes for the overpaid loan - it would ...
D Stanley's user avatar
  • 136k
8 votes

How do I record a purchase of gas in a gnucash chart of accounts?

As for recording this in a double-entry accounting system, you're absolutely on the right track. You need to credit the source of funds (your Cash account in this case) with $50, and debit the ...
Greg Schmidt's user avatar
  • 1,473

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