To illustrate the cost of an asset, assume that a company paid $10,000 to purchase used equipment located 200 miles away. Cost is defined as all costs that were necessary to get the asset in place and ready for use. These assets are often described as depreciable assets, fixed assets, plant assets, productive assets, tangible […]
1 2 Accounting Quick Reference and Terms Accounting, The Language of Business
These categories, including assets, liabilities, equity, revenues, and expenses, help in organizing financial data systematically. The three elements of the accounting equation are assets, liabilities, and shareholders’ equity. The three account types we’ve thus far discussed, assets, liabilities, and equity, are the three elements of the accounting equation. Examples of current assets include accounts receivable […]
How to Calculate Income Tax Expense Step-by-Step Formula & Examples
Aim for software that can import your financial data, sort deductible from nondeductible expenses, and apply current tax laws seamlessly. Once you deduce this net figure, you apply the current tax rates, and – voilà – you’ve got a clearer picture of your tax responsibilities. Small businesses, on the other hand, will subtract their business […]