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Segregation of duties with bank payments

When it comes to bank payments and someone else doing them or you being in control of bank payments in someone else’s company, surely you’d want someone to also review the payments. Bank is an entity holding the company’s funds and as they’re used, the company is giving away its resources – being responsible for […]

Accounting for bonuses to employees

With bonuses to employees it’s important to remember one simple rule – they’re always supposed to be expensed within the reporting period they relate to. I know it’s obvious, but for some reason the mistakes happen often enough to have this explained further. There are questions people struggle with and hence it seems safer to […]

Reversing bonus expense

Not always what you estimate works out the way you initially thought. An estimate in essence is “estimating” or “guessing” what might happen based on the information you have at your disposal at the time you’re making the estimate into your accounts. 

Reporting inventories on statement of cash flows

Reporting your inventories on statement of cash flows is virtually always done under operating activities cash flows. When you think about it, what are operating cash flows in essence? They’re meant to show the flows your business is able to generate from its operations, from its day-to-day activities. So it’s safe to say that inventories […]

Restate or recognize in current period?

Question often asked and more than often faced is whether to restate financial statements because of an error or transaction not recognized in its proper period or not to do it. Usually there’s this tendency to restate financial statements and I have to admit, it’s not so much a judgment call but also understanding what […]