Accounting Firm in Texas

  What Is Petty Cash? A petty cash fund is a small amount of company cash, often kept on hand (e.g., in a locked drawer or box), to pay for minor or incidental expenses, such as office supplies or employee reimbursements. A petty cash fund will undergo periodic reconciliations, with transactions also recorded on the financial statements. In larger corporations, each department might have its own petty cash fund. KEY TAKEAWAYS Petty cash is a nominal amount of money readily accessible for paying expenses too small to merit writing a check or using a credit card. In larger corporations, each department might have its own petty cash fund. A petty cash fund can be used for office supplies, cards for customers, flowers, paying for a catered lunch for employees, or reimbursing employees for expenses. Petty cash's main advantages are that it's quick, convenient, and easy to understand and use. Disadvantages of petty cash funds include their vulnerability to theft and misuse, and the ...

  What is an Oral Contract? An oral contract is a type of business contract that is outlined and agreed to via spoken communication, but not written down. Although it can be difficult to prove the terms of an oral contract in the event of a breach, this type of contract is legally binding. Oral contracts are often mistakenly referred to as verbal contracts, but a verbal contract is really any contract since all contracts are created using language. Understanding Oral Contracts Oral contracts are generally considered as valid as written contracts, although this depends on the jurisdiction and, often, the type of contract. In some jurisdictions, some types of contracts must be written to be considered legally binding. For example, a contract involving the conveyance of real estate must be written to be legally binding. In some cases, an oral contract can be considered binding, but only if it’s evidenced by a written contract. This means that once the oral contract has ...

Revenue and retained earnings provide insights into a company’s financial performance. Revenue is a key component of the income statement. It reveals the "top line" of the company or the sales a company has made during the period. Retained earnings are an accumulation of a company's net income and net losses over all the years the business has been in operation. Retained earnings make up part of the stockholder's equity on the balance sheet. Revenue is the income earned from the sale of goods or services a company produces. Retained earnings are the amount of net income retained by a company. Both revenue and retained earnings can be important in evaluating a company's financial management. KEY TAKEAWAYS Revenue is a measure showing demand for a company’s offerings. Each period, net income from the income statement is added to the retained earnings and is then reported on the balance sheet within shareholders' equity. Over time, retained earnings are a key com...

Retained earnings are the portion of a company's net income that management retains for internal operations instead of paying it to shareholders in the form of dividends. In short,   retained earnings   are the cumulative total of earnings that have yet to be paid to shareholders. These funds are also held in reserve to reinvest back into the company through purchases of fixed assets or to pay down debt. KEY TAKEAWAYS Retained earnings (RE) is the surplus net income held in reserve—that a company can use to reinvest or to pay down debt—after it has paid out dividends to shareholders. When a company has positive profits, it will give some of it out to shareholders in the form of dividends, but it will also reinvest some of it back into the company for growth reasons. Any aspect of business that increases or decreases net income will impact retained earnings, including revenue, sales, cost of goods sold, operating expenses, depreciation, and additional paid-in cap...