It’s one thing if you receive bonuses from your suppliers, but somewhat different if you’re the one paying bonuses. Those are the bonuses you calculate on the bases that you’ve determined with your clients and they’re the ones that decrease your profits at the end. Continue reading
Author Archives: Karl
Treatment for bonuses received
Bonuses you receive are those suppliers pay to you. They may be calculated on various bases, mostly volume, but also from sales of specific products, with determined prices etc. They also may be paid monthly, quarterly or even annually. Continue reading
Incorporation expenses
When establishing your company, incorporating it by all relevant regulations etc., paying registration and whatnot fees, you encounter expenses.
Something that seems natural is to capitalize those expenses into your intangible assets and then amortize them into expenses over a period in time. Another method I’ve noticed is capitalizing them and bluntly leaving them there with an indefinite life. Continue reading
What is inventory?
Your inventory is an amount of goods and / or materials you own in your business. An item of inventory is a physical, tradable and / or usable item. The general purpose of an inventory item and obviously inventory total is always to make business.
Items of inventory are such that you use for either production, sales (that is you’re selling those items) or for your own use in running your business. The latter is something that’s rather not common, but happens nonetheless. Continue reading
The basic accounting formula
Accounting is about numbers and since accounts need to balance out, the numbers need to match. How do they much in accounting though?
As you know, accounting is about debits and credits and hence it’s called double entry accounting. You cannot make a debit entry without a credit to support it and vice a versa. As such, both sides, debits and credits need to equal out. Continue reading
Credit invoice from your supplier – treatment
Every now and then it happens that your suppliers make mistakes. They send out wrong invoices for completely wrong goods, right goods but wrong prices etc. Be the reasons what they are, you need to account for the invoice regardless.
Unless your supplier sends the credit invoice right away, at first you’re stuck with the wrong invoice and if you want to start selling the goods or using them at least, you need to account for them. Continue reading
Owning a building versus renting
You’re in need of a office space and let’s presume you have two options – whether to buy a small place or rent another. They are equally suitable both in terms of interior and their place in the neighbourhood. Which one would you go for?
On one hand you could buy a place, which in return would be yours. You’d have full rights deriving from ownership over the place, i.e. refurnishing, remodelling etc. You’d have all the rights to use the place as you see fit and as the neighbours allow obviously. A downside of an ownership is that you’re tied to various obligations to maintain the premises not just clean but also fixed and renovated. Yes, if it’s part of a bigger building, it’s not just you alone, but still. You’d be part of all the other owners who face that obligation. Continue reading