Capital of an entity is divided into two – internal and external capital. An internal capital is owner’s equity and external capital is what third party has “paid into the entity”. Normally loans given and not supplier payables are defined as external capital. The reason for that lies behind the subject matter – supplier payables […]
With loans you’ll be taking, often times the transaction costs are a significant part of the loan, i.e. like in our example of lending 100,000 a contract fee of 2,000 would be considered as significant. Now in case the cost is less significant, say 500, this would be charged to expenses right away and you’d […]
When selling your goods to a distance, it’s crucial to set the transfer or delivery terms. It’s not so much for understanding who has the rewards from the ownership but the risks. If something were to happen with the goods while in transfer, someone has to bear the costs.
Sale of goods is seemingly simple – you have goods, you have a customer who wants to buy them and you sell them. As you sell them, you recognize the sale in your accounts and that’s all really.
When we talk about factoring, we’re talking about selling ones receivables or collection of receivables to a third party commercial financial company. The aim of such a transaction is to receive cash quicker than one normally would if it would wait for the collection due dates or even late payments. You’ll be getting your money […]
What happens in your accounting if you’re only paid partly at times? It’s one thing to consider whether it’s acceptable for you, but another to give it a proper treatment in your accounting.