Category Archives: Bookkeeping

Yes, if a company’s EBIT is negative, the TIE ratio will also be negative, indicating that the company is not generating sufficient earnings to cover its interest expenses. However, it only provides a single snapshot of the company’s ability to pay interest based on historical data. It doesn’t consider future fluctuations that may impact this…

To understand how to close expense accounts, the first step involves transferring revenue to the Income Summary. At the end of the accounting period, move all revenue account balances into the Income Summary account. Catch-up bookkeeping focuses on recording and reconciling past transactions to bring financial records up to date. Clean-up bookkeeping goes further by…

The money deposited into your checking account is a debit to you (an increase in an asset), but it is a credit to the bank because it is not their money. It is your money and the bank owes it back to you, so on their books, it is a liability. Furthermore, utilize technology to…

Further, Book Value Per Share (BVPS) can be computed based on the equity of the common shareholders in the company. These adjustments are important to reflect the true economic value of a company's assets and to compare its performance with other companies in the same industry or sector. Book value adjustments can also have implications…