Unbilled accounts receivable, while indicating future income, can complicate financial management. Poor tracking can mess up profitability measures, obscure cash flow, and hinder smart decision-making. In some cases, a company’s billing cycle might not perfectly align with its revenue recognition. A project isn’t fully complete, so the invoice isn’t sent, leading to a pileup of…
Generally, Prepaid Insurance is a current asset account that has a debit balance. The debit balance indicates the amount that remains prepaid as of the date of the balance sheet. As time passes, the debit balance decreases as adjusting entries credit the account Prepaid Insurance and debit Insurance Expense. The company pays most insurance expenses…
For existing businesses, the deadline is two months and 15 days after the start of the tax year. New businesses can file at any time before the tax year begins. Eligible entities must also maintain an acceptable stock structure. This ensures equal rights and distributions among shareholders. In this system, the profits or losses of…
A low DSO number means that it takes your company a reasonably short time to collect payment from customers paying on credit terms. A high DSO number means that it takes your company longer to collect from these customers and could potentially signal inefficiencies in your collections processes. The calculation of days sales outstanding (DSO)…
This information can be used by investors, creditors, and other interested parties to make informed decisions about whether to invest in or lend to the company. Current assets include resources that are consumed or used in the current period. Also, merchandise inventory is classified on the balance sheet as a current asset. A balance sheet…
