The Acid Test Ratio, also known as the quick ratio or liquid ratio, is a financial metric that assesses a company’s short-term liquidity and ability to meet its immediate liabilities without relying on the sale of inventory. It is a more stringent measure of liquidity than the current ratio, as it excludes inventory from current… Continue reading What Is The Acid Test Ratio or Quick Ratio?
Category: Accounting Basics Series
Is Advanced Accounting Training Right For You?
Are you satisfied with your career right now? Don’t you wish to move upwards or be promoted? One way to develop your accounting career is by training in an advanced accounting career. You can even try taking up a different field if you like, but always remember to remain motivated in your present career. You… Continue reading Is Advanced Accounting Training Right For You?
What Is A Price/Earnings Ratio or P/E Ratio?
The Price-to-Earnings (P/E) ratio is a financial metric that is widely used to assess the valuation of a publicly traded company. It is calculated by dividing the market price per share of a company’s stock by its earnings per share (EPS). The formula for the P/E ratio is: P/E Ratio= Earnings per Share divided by… Continue reading What Is A Price/Earnings Ratio or P/E Ratio?
What Are Basic Accounting Principles?
If everyone involved in the accounting process followed their system, or no system at all, honestly, there’d be no way to tell whether a company was profitable. Most companies follow generally accepted accounting principles or GAAP; considerable tomes in libraries and bookstores are devoted to this topic. Unless a company states otherwise, anyone reading a… Continue reading What Are Basic Accounting Principles?
Are You Considering an Auditing Career?
There are several career choices within the accountancy field, including an accounting auditing career. Auditors play a vital role, especially in the business industry. They perform various tasks that are considered essential to the financial matters of any business. There is a great demand for company auditors, and according to the Labor Bureau, the demand… Continue reading Are You Considering an Auditing Career?
How To Be Successful In Accounting Careers
If you have an ambition to pursue a career in accounting or accountancy, start planning before jumping into this field. This will enable you to achieve your career goals in the accounting field successfully. Remember that the first step to success is having good knowledge and making the right decisions. So, here are the steps… Continue reading How To Be Successful In Accounting Careers
Do You Need a Forensic Accountant?
Forensic accounting financial investigative specialists work with financial information to convey complicated issues in a manner that others can easily understand. While some forensic accountants and forensic accounting specialists are engaged in the public practice of forensic examination, others work in private industry for such entities as banks and insurance companies or governmental entities… Continue reading Do You Need a Forensic Accountant?
Accounting Method – Cash or Accrual – What’s The Difference?
When starting a business, you must determine your method for accounting and paying taxes. The two choices are the cash method and the accrual method. Cash Method The cash method is probably your best accounting choice if you want simplicity. Generally, income and deductions can be claimed when payment is received or made. This is… Continue reading Accounting Method – Cash or Accrual – What’s The Difference?
Employee Payroll Tax – What You Need to Know
Employee taxes can be among the most difficult-to-understand areas of running a business and hiring employees. If you don’t understand the complexities involving employee payroll tax, it can also get you into a heap of trouble. The first employee tax factor you should understand is what taxes you are responsible for as an employer. There… Continue reading Employee Payroll Tax – What You Need to Know
GAAP Basics
While many businesses assume that generally accepted accounting practices bind accountants and that these are inviolate, nothing could be further from the truth. Everything is subject to interpretation, and GAAP is no different. For one thing, GAAP permits alternative accounting methods to be used for certain expenses and revenue in certain specialized types of businesses.… Continue reading GAAP Basics