Accounting

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About.com explains that a capital contribution in accounting is a segment of a company's recorded equity. The amount may be contributed using cash, equipment or other fixed assets. A common way for an owner to contribute capital to a company is to buy stocks.

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  • What is the difference between accounting and bookkeeping?

    Q: What is the difference between accounting and bookkeeping?

    A: Bookkeeping involves recording basic accounting transactions such as recording invoices from suppliers, paying suppliers, processing payroll and recording cash received from customers. Bookkeeping is a subset of accounting. Accounting is usually more involved and includes activities such as creating financial statements, creating budgets and compiling tax returns.
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  • What is owner's capital?

    Q: What is owner's capital?

    A: In business, owner's capital, or owner's equity, refers to money that owners have invested into the business. In some instances, individuals prefer to finance activities through capital, rather than loans, to avoid facing any financial interest charges.When activities are financed through capital in a business, the profits must be paid to the owners.
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  • What does retro pay mean?

    Q: What does retro pay mean?

    A: Retro pay are wages due to an employee for work already performed or services already rendered, usually in association with a pay raise that requires some sort of payroll action before taking effect.
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  • How do you define accounting ethics?

    Q: How do you define accounting ethics?

    A: Accounting ethics refers to the standards of right and wrong conduct that apply to the accounting profession. Various accounting organizations maintain professional codes of conduct to assist accountants with upholding ethical behavior.
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  • What is the definition of "revenue allocation"?

    Q: What is the definition of "revenue allocation"?

    A: Revenue allocation is the distribution or division of total income, or revenue, in a business, corporate or government structure. It involves a complex process that entails how and where to allocate revenues in order to ensure the viability of departments and maintain the operating structure of the organization.
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  • What is a goods received note?

    Q: What is a goods received note?

    A: A goods received note is a receipt given to the supplier to confirm delivery or acceptance of goods by the customer. After the supplier receives this note, a payment invoice is sent to the customer.
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  • What is strategic management accounting?

    Q: What is strategic management accounting?

    A: According to a Houston Chronicle article by Grant Houston, strategic management accounting is a form of business inquiry that combines the accounting criteria of an organization with external factors that influence the organization, such as industry trends in costing, pricing, market share and resources. The goal of strategic management accounting is to provide companies with a comprehensive means to analyze future business decisions. It is more complex than management accounting.
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  • What are examples of liquid assets?

    Q: What are examples of liquid assets?

    A: Some examples of liquid assets include cash held in a safe deposit box, checking accounts, saving accounts, money market accounts, U.S. Treasury bills and some types of retirement accounts. An asset is liquid if you can quickly turn it into spendable cash without a significant penalty or loss in the underlying value.
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  • Why is financial reporting important?

    Q: Why is financial reporting important?

    A: Financial reporting is important because it helps to ensure that companies and organizations comply with relevant regulations and, if it is a public company, shows investors the current financial health of a company. Investors use need this data to make investment decisions, voice concerns and vote on issues at shareholder meetings.
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  • What is an invoice used for?

    Q: What is an invoice used for?

    A: An invoice is a document sent by a business to a client denoting an obligation to pay for goods or services. One primary purpose is to communicate the requirement to pay for the goods. The other is to document the transaction as an accounts receivable in its accounting system until the bill is paid.
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  • What are some advantages and disadvantages of trade credit?

    Q: What are some advantages and disadvantages of trade credit?

    A: The greatest advantages of trade credit to businesses include the availability of zero percent financing and potential discounts on needed goods, while the biggest disadvantage is the risk of late payment fees. Trade credit is an arrangement between a supplier and a business to receive goods or services while delaying cash payment until a later date.
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  • What are the benefits of using an accrual-basis income statement?

    Q: What are the benefits of using an accrual-basis income statement?

    A: An income statement that uses accrual-basis accounting methods recognizes losses more quickly, avoiding the distortion that sometimes occurs with cash-basis accounting, delaying the recognition of losses for several years. For some businesses, this method provides a more accurate picture of profitability.
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  • How long is the CPA exam?

    Q: How long is the CPA exam?

    A: The CPA exam lasts a total of 14 hours. It has four different sections, with two sections lasting four hours and two sections lasting three hours.
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  • What is the prime cost formula?

    Q: What is the prime cost formula?

    A: The formula for prime cost is the sum of the direct cost of materials, the direct cost of labor and the direct cost of expenses, according to BusinessDictionary.com. The prime cost is the cost of a particular product that the manufacturer incurs apart from any business overhead expenses.
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  • How do you write a monthly report?

    Q: How do you write a monthly report?

    A: Monthly reports are used by project managers and program directors to inform supervisors of the progress of projects. The reports are based on one calendar month and are usually turned in within a week after the month ends. A report typically consists of one or two pages of easily digestible information.
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  • Is revenue the same as sales?

    Q: Is revenue the same as sales?

    A: According to About.com, sales can account for a part or the whole of a company's revenue. Revenue is the amount of money that a company earns from its primary activities. If a company's primary activity is sales, such as a retail corporation, then revenue is the same as sales. If a company has different revenue streams, such as sales and rental income, then sales accounts for a portion of revenue.
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  • What is a 13-month salary?

    Q: What is a 13-month salary?

    A: A 13-month salary refers to a payment made to employees above their normal salary, usually equivalent to a month's salary. This type of payment is made as mandated by local law or as part of an employment contract.
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  • What are sundry expenses?

    Q: What are sundry expenses?

    A: Sundry expenses are costs which may be relatively small or occur infrequently and are therefore not assigned to a specific ledger group. They are also known as miscellaneous expenses and are classified together as a group when they are presented in an accounting statement.
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  • What are net fixed assets on a balance sheet?

    Q: What are net fixed assets on a balance sheet?

    A: According to Ohio State University, net fixed assets on a balance sheet are the book value of a company's long-term assets, such as property, vehicles or equipment. The net fixed asset value is calculated by taking the gross asset value, or purchase price, and subtracting the accumulated depreciation of value.
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  • Why is accounting called the language of business?

    Q: Why is accounting called the language of business?

    A: Accounting is the language of business because it helps people, both internal and external, to understand what is happening inside of s business. Just as language is universal to people, so is accounting in business. Regardless of where in the world a business is located, financial information is interpreted in the same way.
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  • What is the meaning of gross pay?

    Q: What is the meaning of gross pay?

    A: An employee’s gross pay is the money earned from working before taxes and other deductions. An employee’s gross pay includes the money they earn from commissions, overtime and tips.
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