Bookkeeping Archives - The Nathan Clinic

Detecting and Correcting Understatements in Financial Accounting

Posted By Dr. Nirmal Nathan

Using the previous inventory example, an accountant determines the balance is $17,000; the balance should be $15,000, however, resulting in an overstated amount. Another account will also have an error, due to the requirements for double-entry accounting. In the world of accounting, understated is an important term that refers to a type of error or inaccuracy in financial reporting. In this article, we will delve into the meaning of understated, its types, and its impact on financial statements. They frequently employ forecasting models that consider a range of factors, including the current state of the economy, prior performance, and any … Continue reading

Reorder Point Formula and Safety Stock: A Complete Guide

Posted By Dr. Nirmal Nathan

ShipBob helps ecommerce brands manage inventory, forecast demand, pack orders, reduce shipping costs, and deliver on customer expectations. With a network of fulfillment centers around the United States and technology that’s integrated with the leading ecommerce platforms, ShipBob helps brands improve their shipping strategy. By using the reorder point formula, you know that when your inventory reaches 175 red bandanas, you need to replenish your inventory so you don’t experience shortages. Even if there are production shortages or shipping delays, Archon Optical’s safety stock ensures they can sell Ghost glasses for two more weeks before running out of stock. For … Continue reading

recruitment What does a job description mean by “candidates need to be able to work on a W2 basis”?

Posted By Dr. Nirmal Nathan

Since he is an independent contractor, a 1099 employee has the option to hire additional workers. Ideally, the hired workers would help him complete the project efficiently. Unlike independent contractors, you cannot just hire W2 employees for a project or according to your budget. Businesses have a longer-term commitment to W2 employees, and decisions to increase or decrease the workforce have a longer-term impact. This is good for employees, because it establishes trust and a sense of investment. Advice For Job Seekers Employers have much more oversight of W-2 employees, controlling their processes, equipment, and output. Once you know which … Continue reading

What Is a Nonprofit Audit? Ultimate Guide + Checklist

Posted By Dr. Nirmal Nathan

Even if not legally mandated, it is advisable to perform regular financial audits to make sure there is strong financial management how to request an audit of a nonprofit and to maintain transparency with donors and stakeholders. By following this checklist, you’ll be well-prepared for your nonprofit audit, reducing the likelihood of surprises and ensuring a smoother audit process. Remember, the goal is to present a clear, accurate, and complete picture of your organization’s financial health to your auditors. An audit is more than just a requirement—it’s a chance to improve your organization’s financial health, strengthen internal controls, and boost … Continue reading

How to Calculate Unit Costs of Production?

Posted By Dr. Nirmal Nathan

EPS is a key performance indicator used by shareholders to assess performance. For example, during the month of July, Rock City Percussion purchased raw material inventory per unit cost of production formula of $25,000 for the shaping department. Although each department tracks the direct material it uses in its own department, all material is held in the material storeroom. Sources for Production Costs Templates For example, if a company rents a warehouse, rent doesn’t go up or down if they produce 100 pairs of ice skates or 1,000. Cost of production or cost price or production costs can be calculated … Continue reading

Independent examination of charity accounts: guidance for trustees

Posted By Dr. Nirmal Nathan

As soon as you know that you will be obtaining an independent audit, begin the planning process. Once your organization has decided to obtain an independent audit, the real work begins. Taking steps to make sure that you are working with the right audit Firm is important. Whether it’s an IRS audit, external audit, or even an internal audit, the process can feel burdensome and worrying. The act emphasizes establishing clear compensation and conflict of interest policies to ensure ethical governance and accountability. These policies https://namesbluff.com/everything-you-should-know-about-accounting-services-for-nonprofit-organizations/ delineate acceptable conduct within nonprofits, particularly concerning executive compensation and potential conflicts of interest. … Continue reading

Accounting Equation Assets = Liabilities + Equity

Posted By Dr. Nirmal Nathan

Maintaining balance in the accounting equation ensures accurate financial records and allows for effective decision-making. If there is a discrepancy or imbalance between assets, liabilities, and equity components of the equation, it means there is an error or omission in recording transactions. Draws are withdrawals of cash or other assets by the owner of a business. However, they budget to actual variance analysis formula + calculation do affect the basic accounting equation, as they reduce the owner’s equity in the business. It is based on the principles of double-entry accounting and ensures that the balance sheet remains in balance. Two … Continue reading

Liabilities in Accounting: Understanding Key Concepts and Applications

Posted By Dr. Nirmal Nathan

Accounts payable would be a line item under current liabilities while a mortgage payable would be listed under long-term liabilities. Ideally, suppliers would like shorter terms so that they’re paid sooner rather than later—helping their cash flow. Suppliers https://www.bookstime.com/articles/law-firm-chart-of-accounts will go so far as to offer companies discounts for paying on time or early. For example, a supplier might offer terms of “3%, 30, net 31,” which means a company gets a 3% discount for paying 30 days or before and owes the full amount 31 days or later. Strategies for Paying Off Debt A company can accrue liabilities for … Continue reading