Top 5 Apps That Make Accounting Easy To Learn

Anyone who is new to accounting is sure to know how hard it is to adjust one’s ideas and master this subject that is vastly different from math. It isn’t quite as easy to learn as other subjects and more often than not students struggle to cope with it and perform poorly in exams. However, there are a few apps that have been designed to help students learn accounting better and master the subject with ease. In fact, most of the online accounting tutors recommend that students use these apps to learn on a regular basis. Read on to learn about the top accounting apps that can help you grasp the nuances of the subject better.

Online-Accounting

#App 1: iFinance

This app is extremely useful for students in class as it provides a financial tool kit that helps them work with their problems. Calculations become very easy with this app and students can go about with their problems in a confident manner. In fact, this app is very useful to users who wish to work on their financial investments too!

#App 2: My accounting teacher

In case you find it way too difficult to understand what is being taught in class, this app can truly be your messiah. Whatever be your problem, you can use this app to understand the topic at hand and work on it with ease. In fact, it is one of the best sources for accounting homework help there is!

#App 3: CurrencyGo

This is yet another interesting app that helps students with currency conversion rates and currency conversion charts. Video tutorials, multiple data sources support and several advanced and important features make this app a must have in every accounting class. With excellent reviews and being free of cost, this app is becoming popular by the day.

#App 4: FAR Notes – Wiley CPA Exam Review Focus Notes On-the-Go: Financial Accounting and Reporting

Almost every accounting student attempts the CPA and FAR Notes from Wiley CPA is perhaps one of the best apps to help you review your Financial Accounting and Reporting paper on the go. Specifically made for CPA aspirants, this app is the best when it comes to reviewing FAR concepts and has more than 100 study cards and interesting features like keyword search and custom notes.

#App 5: CLEP Financial Accounting Exam Prep / Practice

This app is specifically designed for the CLEP exam and has around 118 questions to help students prepare for the CLEP. The app covers every topic that the CLEP focuses on and is very helpful for those taking up accounting in college too as it serves as an introductory review package for beginners. Practise tests, refreshers and course materials too available in the app and this is a must have for CLEP aspirants.

Summary

With technology playing an increasingly important role in modern day education, it is important to accept and welcome it with open arms. Apps are the latest study aids that students are relying on to review concepts learnt in class and when it comes to subjects like accounting, they serve as the best accounting assignment help and homework help a student could ask for!

Easy Solutions For Finance Topics Under One Roof Via Finance Assignment Help Online

Finance is a subject that deals with monetary transactions like raising and investing funds in business. It is related to topics in marketing, business management and operation technology and involves intricate concepts for analysis. Learning Finance is a good option as it leads to many new portals in career and heads students into new pastures of learning in their advanced courses.

assignment help

Doing assignments in Finance topics is not an easy task as it demands skills of drafting, collecting statistical data and graphing from students. Anyhow, they have online tutoring sources as their stand by and can cope with any Finance related tasks through their help. The easiest way to score high grades in Finance assignments is through seeking Finance assignment help online and breezing through difficulties in doing Finance topics in a short span of time.

Seeking Finance assignment help online is for your best scores

Finance deals with three major areas like Corporate Business Finance, Investments and Finance Markets and Institutions. When Corporate Finance deals with the decisions of a company in areas of Finance and investment actions, Investments deals with short term securities like marketable securities and long term securities like stocks and bonds. Learning about Financial Markets is important for knowing the transactions between users and servers of funds.

All the topics in Finance demand well researched material for assignment topics and students have to spend lots of time on web search and gather information. The relevance of the material and the reference styles expected can take much of time from students in preparing their assignments in Finance. Qualified and certified tutors are available in the tutoring field and they render 24/7 services with personalized sessions for assignment help in Finance and thus help students reduce their burden in doing assignments in the subject.

Why to seek Financial Accounting assignment help?

Financial Accounting deals with writing financial statements or reports about the financial transactions of a company. Financial statements are made by way of income statement, cash flow statement and balance sheet. Writing assignments in Financial Accounting is based on these reports and it is actually a hectic work for students as each type of report needs a particular type of information. Financial Accounting assignment help from expert tutors in the subject helps students analyze the topics, research material and get good assignments written on the required topics.

Benefits of getting History assignment help

History is a very vast subject and to prepare assignment s in the subject topics is laborious and time taking. Tutoring sites offer History assignment help for political, economic, cultural history of a country to facilitate easy assignment writing for students. There are websites that offer tutors for students to browse web together for their topics, gather material and seek guidelines from tutors for their history assignments. With their coherent and well organized material, online writers in History make an interesting study of the aspects of the given topic in history and make students understand the historical facts via their lively presentation.

Conclusion

To be short, online assignment help for Finance, Finance Accounting and history is affordable, user friendly with on time delivery. The tutors lessen the burden of the students through their well researched and organized papers which are meant for creating unique insights about the topics given. Since the assignments are plagiarism free and error free, they lead to top scores in the subjects raising students’ grades to straight ‘A’s.

With everything done online, getting assignment help online is the way for smart learning with improved scores for assignments in tough subjects like Finance.

9 Things You Need To Know About Financial Statements

Financial StatementEvery business owners, company investors and board of directors would like to see how their company performing financially. A need for preparing financial statements becomes a routine part for any organization. These financial statements tell business owners, companies board of directors a true picture about the health of their organization. Therefore, interpreting and understanding these financial statements becomes important on the part of investors, owners and companies board of directors.

What is Financial Statements?

Financial statements are formal record of the financial activities and position of a business, person, or any organization or a legal entity. The financial activities are presented in a structured manner which is easy to read and understand by any individual. The key financial information’s are recorded either on:

  • Income Statement
  • Balance Sheet
  • Statement of Cash Flow

In this article, I will explain you what the financial statements have to offer and how to use them to work in your favor.

  1. Business Investor and Financial Analyst all use Balance Sheet, Income statement and Statement of cash flow before making any financial decision. These statements truly reflect the financial health of any organization. The other statements such as statement of owner equity, retained earnings are important too but not critical. Investors can refer them also to make their financial decision.
  2. The financial statements are widely used to develop a score card to help business owner to compare the score card with actual and make any decision if there is any variance between the score card and actual results. Financial Analyst prepares this score card based on the historical financial information presented by the company in the form of Financial Statements.
  3. The financial statements are widely used by financial analyst to calculate various financial ratios which tend to show an indicator of company present performance and where company is heading in the future. These financial ratios are often presented to board of directors or investors for review.
  4. An active investor likes to see these statements before investing in to company. The auditor of company uses these financial statements to prepare his audit report. The audit report can either be unaudited which is based on mid-year financial statement and final auditor report which is normally completed after the company financial reporting period ends.
  5. If the company owns several other subsidiaries companies, the financial statements can also be prepared as consolidated financial statement where it includes financial information of both parent company and all its subsidiaries companies.
  6. GAAP (generally accepted accounting principles) rules followed by majority of large companies which allow the company to prepare their financial statements according to GAAP. There are basically two conventions, one of historical cost and other one accrual accounting, according to GAAP, the assets are valued at their historical cost whereas revenues and expenses are recoded when they are incurred. Therefore, the investor should really need to understand the statement of cash flow of any organization to see health of the company performance.
  7. Income statement is another statement that cannot be overlooked by any investor. Income statement normally reveals the ability of a business of how much business generates a profit. On the other hand, it does not reflect how much of assets and liabilities business required to generate a profit.
  8. Investor or financial analyst can perform a variance analysis if they have the financial information’s to see some powerful indicator such as profitability trend, sales trend and revenue trend. These variance analyses help the investors to make their financial decisions.
  9. Cash flow statement is the most important financial statement for any business mainly because it focuses solely on changes in cash inflows and outflows over a period of time. This report presents investors a more clear view of a company’s cash flows than the income statement, which can sometimes present skewed results, especially when accruals are required to be maintained according to GAAP

Conclusion:

An overview of the above financial statement helps the readers to see a bigger picture of the company. However, the beginning investor should also prepare to learn more about investment qualities before they invest in the companies.

Still confused about financial statement? Connect with online accounting tutor to understand more about financial statements and improve learning before investing.

Guide To Understanding And Setting Up The Chart Of Accounts For Any Business

Chart of accountsChart of accounts are those accounts which are commonly used by medium or large corporation to classify its income statement, balance sheet items in a structured way by department, expenses, incomes, assets and liabilities of an organization.

It is also a powerful tool for any organization to manage its expenses, revenue, assets and liabilities in order to understand the overall financial health of the organization. Normally all the charts of account run using accounting software which aggregate the entity financial information. The information can be sorted by department for any time frame.

Each account in the chart of accounts is typically assigned a unique number by which it can be identified. The unique number generally starts from numerical number from 1-5 where:

1 Represent Current Assets

2 Represent Current Liabilities

3 Represent Operating Incomes

4 Represent Cost of Goods Sold

5 Represent Operating Expenses

How to set up the chart of accounts?

Business owners can set up their business chart of accounts as shown below. As you can see in the table below, each account is assigned a unique number which is 5 digits long. It is the industry standard however, the business can shorten or make longer number as they wishes.

Assets Side of Balance Sheet (account numbers start with 1)

Current Assets

10100 Cash – Regular Checking

10200 Cash – Payroll Checking

10600 Petty Cash in hand

12100 Accounts Receivable

12500 Provision for bad debt

13100 Inventories

14100 Supplies

15300 Prepaid Insurance

Fixed Assets:

17000 Land

17100 Buildings

17300 Equipment

17800 Vehicles

18100 Accumulated Depreciation – Buildings

18300 Accumulated Depreciation – Equipment

18800 Accumulated Depreciation – Vehicles

Liabilities Side Of Balance Sheet (account numbers start from 2)

Current Liabilities:

20110 Notes Payable- Line#1

20210 Notes Payable -Line #2

21000 Accounts Payable

22100 Wages Payable

23100 Interest Payable

24500 Unearned Incomes

Long-term Liabilities

25100 Mortgage Loan Payable

25600 Bonds Payable

25650 Discount Payable

Stockholders’ Equity

27100 Common Stock

27500 Retained Earnings

29500 Treasury Stock

Operating Incomes (account numbers start with 3)

31010 Sales

31022 Sales

32016 Sales

33110 Sales

Cost of Goods Sold (account numbers start from 40000)

41010 Cost of Goods Sold-Line#1 (COGS)

41022 Cost of Goods Sold -Line#2 (COGS)

42016 Cost of Goods Sold -Line#3 (COGS)

43110 Cost of Goods Sold -Line#4 (COGS)

Operating Expenses (account numbers start from 5)

50100 Salaries (Marketing)

50150 Payroll Taxes (Marketing)

50200 Supplies (Marketing)

50600 Telephones (Marketing)

59100 Salaries (others)

59150 Payroll Taxes (others)

59200 Supplies (others)

59600 Telephone (others)

Following the above structure, organization can structure their chart of accounts by expense, by sales department, marketing department, Engineering department and accounting department.

Still confused about how to set up chart of accounts? Connect with expert Online Accounting Tutor right now and learn how to set up chart of accounts for your business.

15 Financial Ratios Every Business Owners Needs to Know

Financial Ratios, Balance Sheet, Income StatementFinancial ratios or accounting ratios are most commonly used by every businesses and companies to determine or evaluate the overall financial health of the business and companies. These ratios are frequently used by financial analyst, managers, shareholders, creditors to find out about the strength and weaknesses of the any organization.

The data used in calculating financial ratios comes from either income statement, profit and loss account, cash flow statement or company balance sheet. These financial ratios allow the companies to compare its financial strength between companies, industries, different time period for one company. These rations are measured always against benchmark set by a company. Without benchmark, these ratios are not so useful. Company have to have some kind of industries benchmark set to compare against its financial ratios.

Most publicly traded companies are required by law to use generally accepted accounting principles (GAAP) for their home country. However, the private companies such as LLC, partnership, private companies are not required to use GAAP method.

There are primarily four main categories of financial ratios that all business used to analyze its data:

  1. Profitability Ratios
  2. Liquidity Ratios
  3. Debt Ratios
  4. Activity Ratios


Let’s elaborate further about all the above financial ratios:

1: Profitability Ratios: These ratios allow companies to measure its ability to make adequate return on sales, total assets and invested capital. In other words, these ratios measure how effectively a company utilizes its resources. Some of the profitability ratios are as follows:

Profit margin ratio: profit margin ratio is calculated by dividing the net income by sales over a reporting period. For example: if company earns net income for $25,000 in a reporting period and its sales amounted to $250,000, the profit margin ratio can be calculated as follows:

Profit Margin Ratio:    Net Income/Sales

Profit Margin:             $25,000/$250,000

= 10%

Return on Investment Assets: Return on investment can be arrived by dividing the Net Income by Total Assets. For example if company Total Assets are $200,000, its return on assets ratio will be as follows:

Return on Assets:   Net Income/Total Assets

ROI:              $25,000/$200,000

= 12.5%

Return on Equity: Return on equity ratio is calculated as dividing the Net Income by Net equity. In other words if company Net equity is worth at $100,000, its Return on Equity ratios will look like as follows:

Return on Equity:   Net Income/ Net Equity

=   $25,000/$100,000

= 25%

Gross Margin Ratio: Gross Margin Ratio can be calculated by dividing the Gross profit by Net Sales. For example: If company gross profit is $50,000 and its net Sales are $250,000. The Gross Profit Margin ration will look like as follows:

Gross Profit Margin Ratio:     Gross Profit/ Net Sales

=    $50,000/$250,000

=     20%

2.Liquidity Ratios: Liquidity ratios determined the company ability to pay it short term obligations normally due within 12 months. There are mainly four liquidity ratio that business or companies would like to find out if they have enough cash to pay its short term debt:

Current Ratio: Current ratio is also known as working capital ratio. The current ratio is calculated by dividing the current assets to current liabilities. For example: If Company net current assets are $150,000 and its net current liabilities are $75,000, The company current ratio will look like as follows:

Current Ratio:         Current Assets/ Current Liabilities

= $150,000/$75,000

= 2 Times

Quick Ratio: Quick ratio is calculated by subtracting Inventory from Current Assets divided by Current Liabilities. For Example: Company Inventory in hand at the end of reporting period amounted to $75,000.

Quick Ratio: Current Assets-Inventory/ Current Liabilities

$150,000-$75,000/$75,000

= 1:1

Cash Ratio: Cash ratios are calculated adding Cash and Marketable Securities divided by Current Liabilities. For Example: If company balance sheet shows cash in hand equal to $100,000 and Its marketable securities on books amounted to $50,000, the its cash ratio should look like this:

Cash Ratio: Cash + Marketable Securities/ Current Liabilities

$100,000 + $50,000/$75,000

= 2 times

Operating Cash Flow: Operating cash flow ratio is calculated as dividing the Operating Cash Flow by Total Debts. For example: company operating cash flow shows $150,000 and Total debt shows $75,000, its operating cash flow ratio should look like this:

Operating Cash Flow: Operating Cash Flow/Total Debts

$150,000/$75,000

= 2 Times

3. Debt Ratios: Debit ratios are also known as leveraging ratios. The ratio is defined as the ratio of total debt to total assets expressed as percentage. These ratios can be interpreted as the proportion of total company’s assets that are financed by company’s debt. The higher of these ratios represent that the company is more leveraged with its debt associated with more financial risk. There are mainly four debt ratios Companies would like to know:

Debit Equity Ratio: Debt equity ratio represent the shareholders equity and the debt used to finance company’s assets. The debt equity ratio can be interpreted as proportion of long term debt plus Value of Leases divided by Total Assets.

Debit Equity Ratio:    Total Liabilities/ Shareholder Equity

For Example: If a company has its total liabilities of $200,000 and total shareholders’ equity of $800,000. Its debt to equity ratio will look this:

Debt Equity Ratio:     $200,000/$800,000

= .25

Total Debt Ratio: Total debt ratio represent the company total liabilities to total assets. The lower the ratio means the company is less dependent on its leverage. In other words, the higher the ratio, the more risk company is taking.

For Example: Let’s assume company total assets at the end of reporting period amounted to $900,000 on the balance sheet. So the total debt ratio will look like this:

Debt Ratio:         Total Liabilities/Total Assets

Debit Ratio:    $200,000/$900,000

= 22%

Interest Coverage Ratio: Interest coverage ratio is commonly used by companies to determine if it can pay interest expenses on its outstanding debt. The ration is calculated by dividing the company earnings before interest and taxes (EBIT) by the total interest expenses. The lower the ratio, the more the company is burdened by its debt expenses. The ratio of less than 1.5 is considered risky as company ability to pay interest expenses will be questionable.

For Example: ABC LTD has its earnings before interest and taxes amounted to $200,000 and Interest expenses amounted to $28,000.

Interest Coverage Ratio:  Earnings before Interest and Taxes/ Interest Expenses

Interest Coverage Ratio: $200,000/$28,000

= 7.14

This represent that the company has good margin of safety to cover its interest expenses.

Cash Flow to Debt Ratio: The cash flow to debt ratio is calculated by dividing the company operating cash flow by total debit. The ratio tell the business owner if they have the ability to cover their debit from its operating cash flow earning. The higher the ratio is, the chances that better the business owner to carry its total debt.

For Example: The Company ABC Ltd. have total operating cash flow amounted to $100,000 and its total debt at the end of reporting period are $130,000. The cash flow to debt ratio will  look this:

Cash Flow to Debt Ratio:         Operating Cash Flow/Total Debt

 

Cash Flow to Debt Ratio:     $100,000/ $130,000

=   .77

4. Activity Ratios: Activity ratios are those ratios that all business owners like to know if they have the ability to convert different accounts of balance sheet in to cash or sales. These ratios widely used to measure the relative efficiency of a company assets, leverage or other balance sheet items. There are mainly three activity ratios that businesses would like to know:

Stock Turnover Ratio: Stock turnover ratio can be calculated by dividing the cost of goods sold by average inventory. Generally the stock turnover ratio can also be calculated by dividing the sales by Inventory. A low turnover is normally considered a bad sign because products value tend to deteriorate as they sit in the warehouse for longer than average period of time.

 

Stock Turnover Ratio:           Sales/ Inventory

OR

Stock Turnover Ratio:     Cost of Goods Sold/ Average Inventory

For Example: If a company shows its sales at the end of reporting period amounted to $500,000 and its inventory shows total to $200,000, then stock turnover ratio should look like as follows:

 

Stock Turnover Ratio             $500,000/$200,000

= 2.5

Assets Turnover Ratios: Assets turnover ratio is calculated by dividing the sales or Revenues by Total assets. Generally speaking, the higher the ratio, the better it is as company generating more revenue per dollar of assets.

For Example: ABC LTD. has total sales at the end of reporting period amounted to $500,000 and its total assets appears on balance sheet at the end of reporting period amounted to $750,000. Then assets turnover ratio can be calculated as follows:

 

Assets Turnover Ratio:   $500,000/$750,000

= 67%

Inventory Conversion Ratio: Inventory conversion ratio is calculated by total inventory to cost of sales divided by 365. The inventory conversion is measured as against the time required to acquire raw materials for a product, manufacture and then sell it.

Inventory Conversion Ratio        Inventory/Cost of Sales/365

In addition to helping management and owners of business in diagnosing the financial health of their company or business, ratios can also helpful for managers to make decisions about investments or projects that the company is considering to take, such as acquisitions, or expansion.

Still confused or need to brush up your knowledge on financial ratios? Connect with our Online Accounting Tutor and get the help right away.

Why Ignoring Variance Analysis Will Cost You Sales?

Variance AnalysisVariance analysis is an integral part of any business to be successful. It is an important tool for budgetary control by means of evaluating the business performance by analyzing the variance between budgeted amount, planned amount or standard amount and actual amount spent.

What is Variance Analysis?

Variance analysis is the difference between standard cost and actual cost incurred during a given period. Variances analysis can be performed both at cost and revenues level. In other words, if a business owner wants to know what is his planned result and how it will look when comparing it with actual results so he can see the overall performance of the business.

For Example: ABC Company has its monthly sales short by $4000.00 as compared to the forecasted sales of $20,000. The percentage of change was 4000/20000 was 20%. This was due to the fact that business lost one big customer who used to buy the company products for $3,500.00 due to late deliveries of shipment to the customer. That resulted a miss in the forecast of sales.

This kind of variance analysis helps businesses to understand why there is was fluctuation in its business and what it can do make changes in order to prevent this in the future.

That was just one example of variance analysis that business can perform regularly, there are several other most commonly used variances that business can use to determine the health of its business such as:

Selling Price Variance: This analysis can be performed by subtracting standard selling price from actual selling price multiplied by actual number of units sold.

Purchase Price Variance: This can be performed subtracting the standard cost from actual price paid for materials used in the production and then multiplied by the actual number of units sold.

Labor Efficiency Variance: Labor efficiency is performed most by manufacturing company where the business owner would like to know what is the labor efficiency variance for a given period of time. This can be calculated simply by subtracting the standard quantity of labor consumed from the actual amount and then multiplied by the standard price per unit.

Direct Labor Rate Variance. This is very important tool that every business owners wants to know about what is the labor rate variance. This can be performed by subtracting standard labor cost from actual price paid for the direct labor and then multiplied by the number of units sold. Direct labor is considers those manpower who are directly used in the production such as machine operator.

Direct Material Yield Variance: This analysis can be performed by subtracting the total standard quantity of material from the actual quantity used then multiplied by the standard price per unit.

Fixed Overhead Spending Variance: Fixed overhead are those expenses that never changes irrespective of sales volume such as salary, rent, insurance, utility expenses. This analysis can be simply performed by subtracting standard cost from fixed overhead cost for any reporting period. If the standard cost exceeds the actual fixed overhead the analysis can assume that they have controlled and managed their fixed expenses well. In other words, if standard fix overhead expenses exceed actual fixed overhead expenses, then business is spending more than on its fixed expenses than its planned.

Variable Overhead Expenses Variance: Variable overhead expenses are those expenses which tend to change when sales volume change such as cost of cost of goods sold, sales commission. This variance can be performed by subtracting the standard variable cost per unit from actual cost incurred during any reporting period and the multiplied by the total actual units.

These variances helps the business owners to understand and manage the present cost and control the future cost. By applying these variances in practice, businesses or companies can save its cost and therefore increase the value of its stockholders.

Still confused about how to apply these variances analysis using excel? Connect with our online accounting tutor today and lean to how to become master in the variance analysis.

3 Ways Companies Can Lower Its Break-even Point

Online Accounting Tutor, Break-even PointBreak even analysis is a key financial tool that every business uses to find out how much they would have to sell in order to cover their fixed expenses. You as a business owner should know about what are your fixed and variable expenses. Break-even point is calculated to determine how much volume of sales you need in order to make profits. It is also an important part of cost-volume-profit analysis.

What is Breakeven Point?

A company break-even point is the point where business sales are equal to both variable and fixed expenses. The company will need to sell enough units in order to be no profit or no loss. This point is called break-even point.

If company sells fewer units of its products, it will incur loss as it will not be able to cover all fixed and variable expense or in other words, if it sells more, it will make profits. To calculate a break-even point, you will need to remember three things:

  • Fixed Expenses: Fixed expenses are those expenses that do not change irrespective of sales volume such as rent, salary, insurance, utilities, office, depreciation, fees etc.
  • Variable Expenses: Variable expenses are those expenses which tend to change with the volume of sales such as cost of goods sold.
  • Price: The price of the product is the price set by the company to sell at wholesale price or cost of manufacturing the product plus mark up.

The Formula for calculating Breakeven Point:

Fixed Cost/(Sell Price-Variable cost)= Breakeven Points (In units)

In the above example, the fixed costs are stated as a total cost whereas the variable cost is stated as per unit cost. In other words the variable cost is calculated by deducting variable cost per unit from sell price per unit. It is also called contribution margin. In other words, the contribution margin is calculated as follows:

Contribution margin =Sell price per unit – variable cost per unit

Example: ABC Inc. has its fixed cost consisting of rent for property, executives’ salaries, property taxes and depreciation on fixed assets for up to $120,000. Its variable cost consisting raw material, factory labor, and sales commission calculated as $1.60 per unit, the product selling price is at $4.00 each.

Given the above example, we can calculate the ABC breakeven point as follows:

Break-Even Point: Fixed Cost/ (Selling Price-Variable Cost)

Break-even Point (BEP): $120,000.00/ ($4.00-$1.60)

=50,000 Units

Give the above example, Company would need to sell 50,000 units to cover its fixed expenses. This is called Break-even point where company will be making no profits and no loss. So If company need to make profit, it would need to sell more than 50,000 units.

3 ways to lower your Break-Even Point:

Let’s say, if the economy is in downturn or recession, the sales volume will drop as there will be less demand for the product company sell. In that case, company will not sell enough to cover its fixed expenses.

In the above example, ABC Company will not be able to sell 50,000 units to cover its fixed expenses. Here is what company can do to sustain in the downturn market.

  1. Company can either increase its sales price so it can meet its fixed expenses. Or
  2. It would have to cut down its fixed expenses so even if the sales volume down, it can still cover fixed cost.
  3. Up-sell and Cross-sell

Let’s say you have found a way to reduce your fixed cost. You are getting a cut in your salary by $20,000. Now the fixed cost will be amounted to $100,000. The new break-even point will look like as follows:

Break-even Point (BEP): 100,000.00/ ($4.00-$1.60)

= 41,666 Units

As you can say, the company will now need to sell 41,666 units as compared wit 50,000 units to cover its fixed cost.

In another example, let’s say you don’t want to make a cut in your salary, instead you would like to raise product selling price per unit.

The new selling price is $4.50

Break-even point= 120,000/ ($4.50-$1.60) =41,379 units

In both the example, you will need to sell lesser units to cover your fixed expenses. However, the better option is number two where company to raise its selling price.

Still confused about how to calculate breakeven point or need to learn more about Break-even point?  Connect with live Online Accounting Tutor  to receive help right away.

Key Difference Between Income Statement, Cash Flow Statement & Balance Sheet

An effective business management needs three very important financial statements that include income statement, cash flow statement and balance sheet. Indeed, all these three financial statements are typically produced with accurate financial information in order to make trustworthy & sound business decisions. Usually, these financial reports reflect the critical info about the different business activities like cash management, effects of business transaction during a particular period, revenues and expenses of a company, equity shares as well as the events on an entity. Each type of statement plays a significant role in a company; in fact these are the essential decision-making tools.

Let’s have a look at the key difference among these significant financial statements:

Income Statement

The statement that depicts financial sustainability assists to represent the current value of the business as well as describes the total profit over the costs of earning of a company for a given period of time. Indeed, income statement is a statement of operations that represent overall income, profit and loss of a business entity. The “Statement of Financial Performance” provides information relating to the sufficiency of the selling prices as well as the adequacy of the profit related to the business owner’s net investment. Along with the profitability, it also indicates how the company’s revenues are transformed into the net income.

Generally, this P&L statement (Profit and Loss Statement) is directly associated to the cash flow statement, balance sheet along with statement of changes in equity. One section of this statement includes details about the revenues & gains and another section includes details about the expenses and losses. The income statement shows a net profit, if gains & revenues are greater than losses & operating costs. On the other hand, in case of greater expenses and losses of the company, the income statement will show a net loss.

 income statement

Cash Flow Statement

The statement of cash flow shows the details of cash funds that a company has taken in or disbursed to or from any another source over a specific period of time. In fact, it describes the source as well as application of received and distributed money or funds throughout the reporting period by comparing the opening balances with the closing balances on cash or cash equivalent accounts. Essentially, the cash flow statement includes all the details from the balance sheet and the income statement in order to give a summary of cash inflows and outflows related to the financing activities, operating activities and investing activities.

Indeed, this statement informs about the movement of cash funds in a specific period of time to the decision makers. By including details of all the cash activities during that period of time, cash flow reports are prepared at the end of an accounting period. In fact, the statement of cash flow is a mirror image of business or a company owner’s ability to pay its bills or invoices in the future.

Read more – What is the difference between Cost accounting, financial accounting and Management accounting?

Balance Sheet

The “statement of financial position” or a balance sheet identifies the financial strength of a company or business at a particular moment in a time. In financial accounting, it is a summary of the financial balances of a corporation, a sole proprietorship, a business partnership or other business organization.

A balance sheet is an essential statement that shows the real picture or snapshot of a company’s financial position and the exact value of the assets that an organization owns at a particular point in time. It is prepared either monthly or quarterly at the end of an accounting period.

ACCOUNTING
“Is possibly the most boring subject
in the world. And also it could be
the most confusing. But if you want
to be rich, long term, it could be
the most important subject.”

The key purpose of all these three aforementioned financial statements is to provide different types of details & appropriate information to financial decision makers that essential to run a company successfully. With the help of this unique, necessary and accessible information, the internal and external decision makers need to make decisions about the distribution of resources within their control. In this way, all the statements assist decision makers choose the most advantageous resource allocation option for their business or a company.

Step Up Your High School Accounting With Amazing Scores Via Tutors From Tutor Pace

Accounting is a subject that baffles many high school students for the new concepts and techniques it introduces in the syllabus. Basic Accounting or Financial Accounting is not an easy cake for many and some even have the fear of not completing the course. Parents too panic, as it is the time for preparing their kids for college entries and high scores with targeted goals. Tutor Pace stands by such parents and students and help them out of such crucial junctures with its Online High School Accounting Tutors.

Online High School Accounting TutorsAccounting tutors of Tutor Pace are certified and tested in every topic they handle in online Accounting classes. So, they are able to face any challenge they encounter in Accounting tutoring sessions and explain the new concepts with easy to follow methods. Balance sheets, Basic Accounting skills, Managerial Accounting, income statements are easy to do activities for students when they enter the fold of our Online Accounting Tutors.

It is an innovative virtual tutoring atmosphere providing safety and security to students. Parents have access to the tutoring sessions and could get report cards periodically. So, getting Tutor Pace services for high school Accounting is an assured mark of success for high school students and parents. You get valuable services for the money you pay at affordable rates. The students also have the access for a free trial session and have an option to choose their favorite tutor.

Accounting is a bit complicated subject wherein you need good understanding which comes out of good rapport between a tutor and student. Our online Accounting tutors are learner friendly and experienced in handling different batches of students at different levels. High school Accounting becomes a simple matter in their hands with their customized techniques and student friendly approach.

Read on to know the benefits of our tutoring through the reviews of our parents and students

Peter (student of K-10 grade): When I started with Tutor Pace, I was shaky in Accounting skills and fumbling with columns. Great job done by my Accounting tutor. Today, I am happy in my Accounting classes following lectures with ease and doing a great job. The round the clock availability of my Accounting tutor and his help on time have been my support in my homework hours. Wow Tutor Pace! Keep it up!

Mrs. Daniel (parent of a 9TH grader): I was in a fix when my daughter entered high school Accounting. She was very weak in the basics and felt like giving up… I contacted Tutor Pace and got a tutor for high school Accounting. The results are amazing. My daughter has picked up the basics, is able to tally balance sheets and she is alright in her Accounting classes. The tutors are friendly, good at the subject and the prices are also not expensive….Great!

Mr. George (parent of a high school student): Accounting was new to my son when he entered high school. I wondered what to do…. Some help as I too wasn’t aware of the skills of the subject… Tutor Pace tutors did a good job… taught Accounting in an easy way and my son is picking up today like anything…his scores are also rising…hats off Tutor Pace!

Accounting Homework Help for high school students from Tutor Pace is affordable and can be availed through live chat, mail and Skype. Join us for soaring scores in high school Accounting!

Accounting Homework Help For Solving Assorted Accounting Issues

Accounting forms the backbone of business transactions with records maintaining them. Learning Accounting turns out tricky many times with its lengthy problems. Accounting homework help sorts out all such issues and enables a student to put across his efforts with success.

online Accounting tutor

Accounting is the lifeline of any business or a management organization and its records are useful for monitoring the monetary aspects of a business concern. Doing Accounting is interesting for those who wish to become entrepreneurs, business persons or management officials. Accounting homework help from online tutoring portals helps students who sit with numerous assignments and homework problems in Accounting every day.

Accounting has many branches like Management Accounting, Financial Accounting, Social Accounting and Tax Accounting and so on. Doing each branch is a challenging task, since each branch has its specific demands and complicated concepts. Problem solving, tallying balance sheets, working on income statements and profit and loss statements need proper attention from students for completion of homework tasks .  You need to show up your logical and analytical skills to do an Accounting problem without a slip. Once you make a slip, it becomes like a maze and you cannot make a way out of it. An online Accounting tutor could be your soul mate to present suitable solutions for all your confusions and find out where you have missed and how you could get over it.

Taking Accounting courses at higher level of learning would be daunting and it definitely needs some external support to win good scores or to get through the subject. Accounting tutoring online could resolve many of the issues you come across on such occasions and help you out triumphantly, leading you to better clarities and excellent conceptual understanding.

Tutor pace has excellent resource for helping students at the neck of the moment when they feel frustrated with Accounting problems.