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Accounting News

Taking a Closer Look at Trial Balances

A trial balance is an accounting tool that helps businesses determine if the double entry accounting system has any mathematical errors. Once the trial balance is worked through, and the total debits and total credits equal each other, we know there are no mathematical errors – but that doesn’t mean […]

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Contingent Liability Defined

As the name implies, a contingent liability for a business does not always happen and depends on how the future unfolds. When it comes to a business analyzing a contingent liability, it focuses on the probability of the business realizing it, the time frame within which the liability might occur, […]

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Defining Materiality in Accounting

In the world of accounting and auditing, there is a concept called materiality. The term materiality essentially means an amount that if erroneously omitted or included impacts the financials of a company to the point where they don’t tell the truth. One very basic example would be if a $1 million revenue small business made […]

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Understanding Mark-to-Market

The term mark-to-market is an important phrase in corporate finance that has many nuances and industry-specific uses. Mark-to-market is a corporate finance term that provides businesses with a way to evaluate a holding’s fair value for both assets and liabilities. Since values can change over time, this gives a rational […]

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How to Account for Capital Assets

When it comes to accounting for capital assets, specifically depreciating capital assets, the Governmental Accounting Standards Board (GASB) provides guidance to state and local governments for accounting processes. The GASB is responsible for the generally accepted accounting principles (GAAP) for the private sector (corporate and business accounting), and it works […]

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Purchase Acquisition Accounting

Purchase acquisition accounting is the commonly accepted method to document the acquisition of another business on the balance sheet of the acquiring company. The business’ assets that are being acquired are documented on the acquiring firm’s books at fair market value. The fair market value – defined as what assets […]

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