Parts of an Income Statement, Part 3

While some lines of an income statement depend on estimates or forecasts, the interest expense line is a basic equation. When accounting for…

Parts of an Income Statement, Part 2

Of course profit and cost of goods sold expense are the two most critical components of an income statement, or at least they’re what…

Parts of an Income Statement; Part 1

The first and most important part of an income statement is the line reporting sales revenue. Businesses need to be consistent from year to…

6 Types of Costs Every Business Should Consider

Direct costs are those costs that can be directly attributed to a product or product line, or to one source of sales revenue, or…

Budgeting your Business

Budgeting is one of those topics we’d rather avoid, but in business, it’s an absolute necessity. To prepare a reasoned and thoughtful budget, an…

What is a sole proprietorship?

A sole proprietorship is the business or an individual who has decided not to carry his business as a separate legal entity, such as…

What are partnerships and limited liability companies?

Some business owners choose to create partnerships or limited liability companies instead of a corporation. A partnership can also be called a firm,…

What is a corporation?

Most businesses start out as a small company, owned by one person or by a partnership. The most common type of business when there…

What is financial window dressing?

Financial managers can do certain things to increase or decrease net income that’s recorded in the year. This is called profit smoothing, income…

Disclosure

Financial statements are the backbone of a complete financial report. In fact, a financial report is not complete if the three primary financial statements…