Subtracting a company's liabilities from its assets results in the business's net worth, also called owner's equity, according to Entrepreneur magazine. Assets, liabilities and net worth are listed on a company's balance sheet.
A:Individuals who withdraw money from a 401(k) account prior to age 59 1/2 must pay a 10 percent penalty in most cases. In addition to the penalty, individuals must pay federal income tax on the amount withdrawn.
A:Current liabilities, also known as short-term liabilities, are business debts that a company reasonably expects to pay with cash within one year or within the company's fiscal year, whichever is longer according to The Law Dictionary, an online version of Black's Law Dictionary. The total amount of current liabilities is tracked in a company's accounting system and reported on its balance sheet.
A:To make a withdrawal from a 401(k) retirement plan, borrowers must contact the human resource office of the employer or the investment company hosting the plan, complete a withdrawal form and provide reasons for the withdrawal if younger than 59 1/2. Fees may apply when withdrawing funds early.
A:The difference between gross and net income is that gross income is the total amount of income made and net income is the total amount of income made after taxes and other expenses have been subtracted. The total gross income or gross amount can refer to total profit or total sales.
A:Cash inflow refers to a business or company's sources of money or income, while cash outflow refers to a business or company's expenses. A business survives if it can generate a larger cash inflow versus a cash outflow.
A:Capital income is income generated by an asset over time, rather than from work done using the asset, according to Investopedia. If a farmer buys land for a certain amount of money and sells it at a profit after one year, the difference in the prices is capital income.
A:According to the Advising & Learning Assistance Center, a good planner is reasonable, sets a workable schedule and anticipates possible setbacks ahead of time by being prepared. It takes practice and commitment to become a good planner, but planning skills can improve with time and experience.
A:To set up a trust, hire an attorney, select a trustee and beneficiary, and decide on the type of trust that is best for your situation. Trusts are not only for the wealthy, but for anyone who wants to maximize tax exemptions while passing on assets in a specific manner.
A:Although there are many similarities between a traditional and a Roth IRA, there are a number of differences. The primary difference is that Roth IRA contributions are not tax deductible, while traditional IRA contributions usually are at least partially tax deductible. Additionally, the Roth IRA has strict income limitations that restrict who is eligible to contribute.
A:Inherited money from a trust may or may not be subject to income tax, depending on the source of the funds. Property or money held by the decedent at the time of death is an inheritance and would not be subject to income tax, according to IRS Publication 559.
A:When a family needs financial help, options to provide assistance include giving a gift of cash, making a personal loan or co-signing on a bank loan, hiring a member of the family, or prepaying some of the family's bills. Non-monetary help one can provide to a family in need of financial assistance includes helping to develop a feasible budget and connecting the family to others who can provide help.
A:Since all monies contributed to a 401(k) plan are protected by federal laws, whether at a current or previous employer, the money is still safeguarded. The best method for locating money in a 401(k) with a previous employer is to contact the employer directly, notes 401khelpcenter.com.
A:Living frugally requires dedication, examination and changes in lifestyle. People wanting to live a more frugal lifestyle should take a close look at where they can reduce their expenditures and adopt new practices, such as utilizing coupons or taking the extra time to shop for the best deals on their next vacation with discount sites.
A:The government offers taxpayers the 401(k) as a retirement savings plan sponsored by their employer. Using this program, workers are able to save and invest a portion of their paycheck before the employer withholds taxes. According to The Wall Street Journal, the employer matches a certain percentage of the savings invested by the employee.
A:The most significant barrier to effective planning is change. Effective planning strategies typically include changes, both real and perceived, to people, systems, processes and structure. This can be highly disruptive to an organization.
A:Subtracting a company's liabilities from its assets results in the business's net worth, also called owner's equity, according to Entrepreneur magazine. Assets, liabilities and net worth are listed on a company's balance sheet.
A:According to The Mint, teaching kids about saving money includes setting savings goals, thinking about saving first rather than last and being smart when shopping. A good way to teach kids about savings goals is to help them buy big-ticket items. However, parents should set a goal that the child has to reach with his own money before the parents pay the rest.
A:A Roth IRA allows investors to contribute money toward retirement with the potential of generating tax-free earnings. Since a Roth IRA is simply a type of account designed to provide favorable tax treatment, investors opening a Roth IRA must then select an investment vehicle they feel balances their risk tolerance with their need for reward.
A:In Charge Debt Solutions explains that saving money is important for a number of reasons; primarily because it creates an emergency cushion for any sudden and unexpected financial crises. Saving money provides financial security during uncertain times, such as serious illness, relocation of work or home, emergency car repairs or replacement, company downsizing, job loss or long-term unemployment.
A:A personal representative's deed is a deed signed by an individual who is looking after the sale of real estate on behalf of another party. The personal representative may be the executor of the estate of a deceased person or the administrator of the affairs of someone who is incapacitated.