Accounts receivable credit balance is the amount owed to a business by customers who have been given credit. It is necessary for most businesses, and can be risky if owed by employees. It is listed on the balance sheet and income statements until paid. Accounts receivable credit balance refers to outstanding loans owed to a […]
A common size balance sheet expresses financial figures as a percentage of the total value for a class of financial information, allowing business owners and managers to quickly identify areas of strength or weakness and compare their financial statements with those of competitors. A common size balance sheet is an alternative form of the traditional […]
A balance sheet is a simple summary of an entity’s assets and liabilities, providing a snapshot of its financial situation. It is useful for individuals and businesses, and can be easily created using basic ledger books or free electronic documents. As one of the most basic accounting documents, the balance sheet is simply a quick […]
Short selling involves selling shares of a company that an investor does not own, creating a short balance in their account. The investor hopes to recover the money by later buying shares to pay off the balance. Short selling is riskier than buying a stock, and brokerage firms often place limits on margin accounts. A […]
Analytical balances use comparisons to measure weight, with modern single-pan balances commonly used for small, accurate weights. Chemistry requires high accuracy, achieved through a clear shield and enclosed parts. Calibration knobs and tare containers aid accuracy, but caution is needed to avoid errors. Electronic balances have safety alerts, and the triple beam and equal-arm balances […]
Balancing tests are a judicial method used to determine the fairest outcome for all parties by considering several factors against each other. They are used in complex situations where a fair result depends on multiple facts. Balancing tests give judges a high degree of discretion, but can lead to uncertainty and subjectivity in the final […]
Balance sheet reconciliation involves four stages: balancing the account against the bank, balancing against the books, comparing bank and book balances, and making necessary adjustments. It ensures bank statements and actual cash match company spending, and is similar to balancing a checkbook. The balance sheet reconciliation process involves four stages. The steps include: balancing the […]
Instant balance transfers can help pay off debt faster with lower interest rates and extra credit, but may incur transfer fees and lose introductory rates if payments are missed or new charges are made on the original card. Instant balance transfers allow a person to transfer debt, usually credit card debt, from one creditor to […]
A pro forma balance sheet projects a company’s assets, liabilities, and equity accounts and is used for business plans, loans, financial planning, and performance comparison. It follows the standard accounting equation and divides assets and liabilities into current and long-term categories. Along with the income statement and statement of owner’s equity, the balance sheet is […]
The previous balance method calculates costs and interest based on the previous billing cycle’s outstanding balance, resulting in higher finance charges. The adjusted balance method considers payments and purchases made during the current billing cycle, resulting in lower fees. Retail stores use the average daily balance method, which can reduce fees but often comes with […]
An adjusted trial balance corrects errors and reallocates values in general ledger accounts used to track business activities. It is reviewed at the end of the fiscal year to ensure accuracy and completeness, and adjustments are made for clarity and consistency in financial reporting according to generally accepted accounting procedures. The final version is used […]
Equilibrium is a rare state of stability in which no net change occurs, important in science, mathematics, and game theory. Homeostasis and dynamic equilibrium are examples. Biological balance is crucial for living organisms and the environment. Equilibrium is a state in which no net change occurs. Something in this state could be considered stable, balanced, […]
The accounts receivable trial balance is a negative balance that totals all credits and debits related to a company’s outstanding debts owed by customers who have not yet completed payment. It is an important calculation for accurate record keeping and is part of a company’s trial balance sheet. The accounts receivable trial balance is an […]
A trial balance is an accounting list that helps identify imbalances between credits and debits. It’s useful to run it on a regular basis to quickly identify and correct errors. It’s also effective in identifying double entry errors and misregistrations. Trial balance is an accounting list showing the beginning and ending balances of all accounts […]
Remaining balance is the amount of money needed to pay off an account, which can be positive or negative depending on the type of account. It is used by homeowners, mortgage lenders, credit card companies, and banks. To calculate it, one needs to gather data such as the original balance, payment amount, interest rate, and […]
Balance protection, or overdraft protection, is offered by banks to prevent bounced checks or insufficient funds. Credit card companies offer insurance for a monthly fee to cover minimum payments if the cardholder loses their job or can’t make payments. Both types should only be used in emergencies and not encourage irresponsible behavior. Balance protection, also […]
A minimum balance is the amount of money required to maintain an account to be eligible for certain privileges, such as free checking or interest-bearing accounts. The balance may vary by institution and account type, and higher balances can lead to more benefits. The minimum balance is usually an average of daily balances for a […]
Declining balance depreciation is a method of measuring an asset’s depreciation value based on its depreciation rate, applying the rate until the value reaches the salvage value. This differs from the straight-line method, and is often used in conjunction with it to produce double-declining-balance depreciation. Declining balance depreciation is a method of measuring the depreciation […]
Work-life balance is the struggle to balance personal and professional obligations. It’s not always a 50/50 split, but avoiding a 90/10 work-life balance is recommended. It’s about finding ways to incorporate personal time into the equation and taking a personal inventory to determine if your work-life balance is acceptable. When it comes to balancing the […]
Balance sheet reserves, also known as claim reserves, are funds set aside by insurance companies to meet payment obligations for approved claims. These reserves are listed as a liability on the balance sheet and are subject to government regulations. Companies may maintain larger reserves to handle high volumes of claims, and adjust the amount based […]
