At the end of 2019, John’s Bicycle Shop had retained earnings in the amount of $90,000, which can be used to invest back into the business, such as by purchasing a larger storefront. The money can also be distributed to John, his brother, and his sister as a dividend, or some combination of the two options. However, if you have one or two investors in your business, you’ll want .

In Brazil, a trade name is known as a nome fantasia (‘fantasy’ or ‘fiction’ name), and the legal name of business is called razão social (social name). Registering a trade name also means you can accept payments that are addressed to either your legal business name or your company’s trade name. This makes it easier for clients and vendors because they don’t have to differentiate between your trade name .

Straight-line depreciation is an accounting method that measures the depreciation of a fixed asset over time. The second scenario that could occur is that the company really wants the new trailer, and is willing to sell the old one for only $65,000. In addition, there is a loss of $8,000 recorded on the income statement because only $65,000 was received for the old trailer when its book value was .

Companies use gross margin to measure how their production costs relate to their revenues. A company might strive to slash labor costs or source cheaper suppliers of materials if its gross margin is falling or it may decide to increase prices as a revenue-increasing measure. New companies should expect their gross profits to be several percentage points lower than established companies in the same industry. The more important metric .

It can include things like check processing fees, wire transfer fees, and more. In contrast, all the receipts of cash are recorded in the cash receipt journal. All entries in the cash disbursement journal have a credit to cash, as all the cash receipt journal entries have a debit to cash. A disbursement is an act of paying out money – especially from a public or dedicated fund. A .